Gold prices slipped on Tuesday as the U.S. dollar gained strength, with investors bracing for a key U.S. inflation report and the Federal Reserve’s interest rate projections.
At 0910 GMT, spot gold was down 0.2% at $2,305.41 per ounce, while U.S. gold futures fell by the same margin to $2,321.90.
Han Tan, chief market analyst at Exinity Group, noted that gold’s decline is linked to the stronger U.S. dollar, which is making the precious metal less appealing to investors holding other currencies.
The focus now shifts to the May consumer price index (CPI) inflation report and the conclusion of the Fed’s two-day meeting on Wednesday. Higher-than-expected CPI prints could push gold below the $2,300 mark, according to Tan, if the Fed indicates fewer than anticipated rate cuts this year.
The possibility of fewer rate cuts has been reinforced by robust U.S. jobs data and reports that China’s central bank refrained from gold purchases, leading to a 3.5% drop in gold prices on Friday.
Industry experts expect China, the top state buyer of gold, to resume purchasing once prices stabilize from their peak in May.
Meanwhile, silver fell by 2% to $29.18 per ounce, platinum was down 0.8% at $960.15, and palladium lost 1.5% at $890.75.
In light of the upcoming data releases and Fed meeting, the precious metals market remains volatile, with investors closely monitoring the developments for potential trading opportunities.
(reporting by Harshit Verma; editing by Mrigank Dhaniwala)
