Gold Subdued as Investors Await Further Data for Fed Rate Cues

Pieces of gold are seen in a mining area in the Madre de Dios department, in Peru's southeastern Amazon region, on May 30, 2024. (Photo by Ernesto BENAVIDES / AFP)
Pieces of gold are seen in a mining area in the Madre de Dios department, in Peru's southeastern Amazon region, on May 30, 2024. (Photo by Ernesto BENAVIDES / AFP)
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Gold Subdued as Investors Await Further Data for Fed Rate Cues

Pieces of gold are seen in a mining area in the Madre de Dios department, in Peru's southeastern Amazon region, on May 30, 2024. (Photo by Ernesto BENAVIDES / AFP)
Pieces of gold are seen in a mining area in the Madre de Dios department, in Peru's southeastern Amazon region, on May 30, 2024. (Photo by Ernesto BENAVIDES / AFP)

Gold prices eased on Monday as investors await further US economic data, while reports from last week showed that inflation was stabilizing, lifting expectations that the Federal Reserve will cut interest rates later this year.
Spot gold was down 0.5% at $2,321.11 per ounce, as of 0546 GMT, after rising more than 1% on Friday. US gold futures fell 0.6% to $2,335.30, Reuters reported.
"Today's small move is probably just a little bit of an unwind of the move that we saw on Friday," said Kyle Rodda, a financial market analyst at Capital.com, adding that in the long run fundamentals are very constructive for gold, but are data-dependent.
US retail sales data is due on Tuesday, weekly jobless claims on Thursday and flash PMIs on Friday. Several Fed officials are also scheduled to speak this week.
"With some signs of weakness emerging in the US economy, which could weaken the US dollar and also increase expectations of rate cuts going forward, gold is in a great position to take advantage," Rodda added.
Data released last week showed some weakening in price pressures in the US, suggesting that the labor market was losing momentum, keeping hopes alive for a September rate cut.
Traders are seeing a 68% probability of a cut in September, according to the CME Group’s FedWatch Tool, compared to 63% before the producer prices data on Thursday.
However, Minneapolis Fed President Neel Kashkari on Sunday said it's a "reasonable prediction" that the US central bank will cut interest rates once this year, waiting until December to do it.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
In other metals, spot silver fell 1.4% to $29.13 per ounce, platinum was down 0.5% at $953.30 and palladium lost 0.1% at $889.21.



Egypt's Central Bank Leaves Key Interest Rates Unchanged

A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
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Egypt's Central Bank Leaves Key Interest Rates Unchanged

A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh
A general view of Dahab Island or Gold Island (Gezirit el-Dahab) in the middle of the Nile River in Cairo, Egypt, July 2, 2024. REUTERS/Amr Abdallah Dalsh

Egypt's central bank left its overnight interest rates unchanged on Thursday, as expected, saying economic growth remained slow but that inflation has been decreasing.
The bank's Monetary Policy Committee (MPC) left the deposit rate at 27.25% and the lending rate at 28.25%.
All but one of 18 analysts in a Reuters poll had expected rates to remain unchanged, with the sole analyst forecasting a cut of 100 basis points (bps).
The decision keeps the overnight deposit rate below that of headline inflation, which was 27.5% in June. Real interest rates have been negative since January 2022. Inflation declined in June for a fourth straight month after soaring to a record 38% in September.
The MPC expects inflation to come down sharply in the first half of 2025.
"The gradual unwinding of food inflation along with the improvement of inflation expectations suggest that inflation is on a sustained downward trajectory," the MPC said.
Gross domestic product inched down to an annualized 2.2% in the first quarter from 2.3% in the final quarter of 2023, the MPC added.
"Leading indicators for Q2 2024 suggest that economic activity remains subdued. Consequently, real GDP growth is expected to slow down in FY 2023/24 compared to the previous fiscal year, before recovering in FY 2024/25," it said.
Egypt reported GDP of 3.8% in 2022/23.
The central bank raised interest rates by 600 bps on March 6 as part of an agreement with the IMF, bringing total increases since the beginning of the year to 800 bps. Egypt also sharply devalued its currency against the dollar under its IMF accord.