Gold Steady as Firm Dollar Offsets Safe-haven Demand

FILE PHOTO: Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su/File Photo

Gold steadied on Monday as a stronger US dollar countered safe-haven demand amid trade war concerns, while investors looked to inflation data this week for clues on the Federal Reserve's next interest rate decision.
Spot gold was at $2,913.09 an ounce at 0946 GMT, while US gold futures firmed 0.2% to $2,920.10.
The dollar index held above last week's four-month low, making gold more expensive for holders of other currencies, Reuters said.
Quantitative Commodity Research analyst Peter Fertig said a rise in the dollar is weighing on bullion and he expects a further correction to below $2,900.
Meanwhile, market focus remains on trade tensions. In his latest warning to Canada, US President Donald Trump said on Friday that reciprocal tariffs on dairy and lumber could be imminent.
Gold's success in holding above $2,900 reflects concerns about the wider economic picture and an ongoing heightened geopolitical risk environment, Frank Watson, market analyst at Kinesis Money, said in a note.
Traders are looking to US Consumer Price Index (CPI) data on Wednesday and the Producer Price Index (PPI) on Thursday for US interest rate cues.
The Fed has held interest rates so far this year after cutting three times in 2024. Market pricing reflects expectations of a further cut in June.
Bullion is seen as a hedge against inflation and geopolitical uncertainty but higher rates can dent the non-yielding asset's appeal.
Data showed top metals consumer China's consumer price index missed expectations in February and fell at the sharpest pace in 13 months, while producer price deflation persisted.
Spot silver edged up 0.2% to $32.59 an ounce, platinum rose 1% to $973 and palladium was up 0.5% at $952.68.