Mumbai, 11 Jun (Commoditiescontrol): Gold prices inched lower on Tuesday as investors awaited the release of U.S. inflation data and the Federal Reserve's policy announcement later this week. This cautious sentiment followed a stronger-than-expected payrolls report last Friday.
Spot gold declined by 0.2%, trading at $2,306.38 per ounce, while U.S. gold futures also fell by 0.2% to $2,323.00. This drop follows a significant decline on Friday, where bullion plunged 3.5%, or about $83, marking its steepest fall since November 2020. The sharp decline was triggered by robust U.S. jobs data and reports indicating that China's central bank was pausing its gold purchases.
The May consumer price index (CPI) inflation report, due on Wednesday, is poised to be a critical data point influencing Federal Reserve expectations. The Fed policymakers are set to update their economic and interest rate projections at the conclusion of their two-day meeting on Wednesday.
A survey conducted by the New York Fed revealed mixed sentiments among the U.S. public regarding the future path of inflation in May. The updated economic projections from Fed officials this week are expected to indicate fewer interest rate cuts than previously anticipated three months ago. Lower interest rates generally reduce the opportunity cost of holding non-yielding assets like gold.
China, the largest official sector buyer of gold, is anticipated to resume its gold purchases once prices stabilize from the record highs seen in May. Industry experts, speaking at a recent conference, emphasized that the fundamental demand for gold remains strong.
In other news, Vietnam is likely to permit companies to import gold for the first time in over a decade. This move aims to narrow the gap between local prices and international benchmarks.
In the broader precious metals market, spot silver fell by 0.7% to $29.56 per ounce. Platinum saw a slight decrease of 0.1%, trading at $966.85, while palladium also edged down by 0.1% to $903.25.
Investors remain focused on the upcoming U.S. inflation data and the Federal Reserve's policy decisions, which are expected to significantly influence market directions.
(By Commoditiescontrol Bureau: 09820130172)
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