Gold prices inch up as traders eye US inflation data, China talks

WASHINGTON: Gold prices rose slightly on Monday as traders anticipated potential US interest rate cuts and awaited key economic data and trade discussions between Washington and Beijing.

According to early trade data, spot gold increased by 0.1 percent to $4,253.33 per ounce at 0331 GMT, while US gold futures for December delivery went up 1.3 percent to $4,266.30 per ounce.

Silver also saw a modest rebound, climbing 0.5 percent to $52.12 per ounce after suffering a 4.4 percent drop on Friday, its steepest decline since April. The previous session’s slide came after prices touched a record $54.47 earlier in the day.

Kyle Rodda, an analyst at Capital.com, said the market was “trying to find its footing after Friday’s selloff” and that sentiment was “normalising” after weeks of intense buying activity.

Gold prices had fallen around 1.8 percent on Friday, their biggest one-day drop since mid-May, following comments from US President Donald Trump. He said his proposed 100 percent tariff on Chinese goods would not be sustainable and expressed optimism ahead of his meeting with Chinese President Xi Jinping.

Analysts said investors were now watching two major developments this week, the upcoming US-China trade talks and the release of US inflation data on Friday. Core inflation for September is expected to remain steady at 3.1 percent, which markets believe will not deter the Federal Reserve from moving ahead with rate cuts.

According to the CME FedWatch Tool, traders are betting on a quarter-point rate cut this month and another in December.

Despite last week’s volatility, gold has surged more than 60 percent so far this year, reaching a record high of $4,378.69 on Friday. The rally has been supported by geopolitical tensions, central bank purchases, rising demand for exchange-traded funds, and a global push to reduce dependence on the US dollar.

In other precious metals, platinum slipped 0.8 percent to $1,596.88 per ounce, while palladium rose 0.2 percent to $1,476.97.