Gold was up on Monday morning in Asia as investors digested the U.S. Federal Reserve’s mixed signals on monetary policy tightening after the release of tame inflation data.
Gold futures edged up 0.18% to $1781.05 by 12:45 AM ET (4:45 AM GMT), after hitting its lowest level since Jun. 21 earlier in the Asian session.
“The jury’s still out on the Fed’s timeline on tapering,” IG Market analyst Kyle Rodda told Reuters.
“On one hand, we’ve to think about normalizing policy, but on the other, a lot of Fed speakers are suggesting inflation will be transitory, so we don’t need the Fed to slam on the brakes. And that is kind of sending mixed signals,” Rodda added.
Investors also continued to digest inflation data released by the U.S. during the previous week. The core personal consumption expenditures index grew a smaller-than-expected 0.5% month-on-month in May while growing 3.4% year-on-year. Gold prices rose as much as 0.8% after the release of the data, the central bank’s preferred inflation measure.
Minneapolis Fed President Neel Kashkari added on the same day that the recent high inflation readings would be temporary.
With the trading in a range and until gold breaks above the $1,800 or below the $1,760 marks, it is looking like a sideways trend in the short term, said Rodda.
Investors also continue to keep an eye on negotiations for U.S. President Joe Biden’s bipartisan U.S. infrastructure deal, valued at $1.2 trillion over eight years.
In other precious metals, silver was steady at $26.07 per ounce, palladium inched up 0.1% and platinum eased 0.7%. Investing.com