Gold Drifts Lower as Traders await US Inflation Data

Gold bullion displayed in a store in the German city of Pforzheim (dpa)

Gold prices eased on Tuesday, while investors looked toward key US inflation data due later this week that could throw some light on the Federal Reserve's stance on interest rate cuts.
Spot gold was down 0.4% at $2,324.69 per ounce, as of 0632 GMT. US gold futures fell 0.3% to $2,336.80.
"Technical factors in the short-term are not so positive for gold. After last Friday's sell-off, short-term traders view this as a bearish signal explaining the lackluster movement for gold holding on to these levels," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA, Reuters said.
Bullion dropped more than 1% on Friday as the dollar jumped after US business activity crept up to a 26-month high in June amid a rebound in employment.
First-quarter US gross domestic product (GDP) estimates are due on Thursday and the personal consumption expenditures (PCE) price index report on Friday.
If the actual number for the core PCE comes in strong, it is potentially not a rosy news driver for gold and could actually see gold break below the $2,300 level, Wong added.
Lower rates reduce the opportunity cost of holding non-yielding bullion.
San Francisco Fed Bank President Mary Daly on Monday said she does not believe the US central bank should cut rates before policymakers are confident that inflation is headed toward 2% but also noted that rising unemployment is increasingly a risk.
Other Fed officials speaking this week include Fed Governors Lisa Cook and Michelle Bowman along with Richmond Fed President Tom Barkin.
Elsewhere, spot silver fell 0.5% to $29.50 per ounce, while platinum rose 0.6% to $1,000.28.
Palladium was trading flat at $979.30.