Gold prices remained unchanged in early Asian trading on Monday, as market participants prepared for significant US inflation data this week that may provide new insights into the Federal Reserve’s forthcoming interest rate decisions. Spot gold steadied at $4,200.23 per ounce by 0010 after reaching a one-week high on Friday. US gold futures for December delivery increased by 0.2%, reaching a price of $4,225.50. Key data scheduled for release this week encompasses the US Consumer Price Index report on Wednesday, succeeded by the Producer Price Index and retail sales figures on Thursday.
In September, the US central bank increased interest rates by 25 basis points. Traders are presently attributing an 18% likelihood to a rate hike in October, while factoring in an 84% probability of an increase by December, as indicated by CME’s FedWatch tool. Gold is recognised as a safeguard against inflation; however, elevated interest rates diminish its appeal in comparison to yield-generating assets. US consumer sentiment declined further in early October, as the escalating cost of living due to the Middle East conflict negatively impacted households’ perceptions of the economy.
Global economic growth is projected to decelerate to 2.6% in 2026, a decrease from 2.9% recorded last year, as the energy shock stemming from the crisis in the Middle East challenges the global economy, according to a report released by the United Nations agency for trade and development on Friday. Gold demand in India exhibited a lacklustre performance last week, while trading activity in the leading consumer, China, remained muted during the shortened trading period due to holidays. Among other metals, spot silver increased by 0.5% to $61.08, platinum saw a rise of 0.4% to $1,693.51, and palladium experienced a gain of 0.7% to $1,155.84.
