(Bloomberg) -- Gold rose ahead of key US economic data due later this week, with traders focused on whether the prints will reinforce bets the Federal Reserve will soon pivot to monetary easing.
Bullion was trading near $2,455 an ounce after dropping 0.5% last week. Investors are preparing for US producer rice index figures on Tuesday and consumer price index numbers on Wednesday. Both will shed light on inflation in the world’s largest economy.
While CPI is expected to show price increases picked up modestly in July, the annual metrics should continue to rise at a slow pace. The recent easing of price pressures has boosted policymakers’ confidence that they can start to lower borrowing costs while refocusing their attention on the labor market, which is showing greater signs of cooling.
Fed Governor Michelle Bowman said Saturday that she still sees upside risks for inflation and continued strength in the labor market, signaling she may not be ready to support a rate cut in September. Higher borrowing costs are typically negative for gold, because it doesn’t pay interest.
The precious metal has gained almost 19% this year and remains in touching distance of last month’s all-time high. Along with rate-cut expectations, it’s also been supported by firm central bank buying and robust demand from Chinese consumers.
Rising Middle East tensions have also bolstered gold’s appeal as a haven asset.
Gold remains “supported by geopolitical risks and anticipated Federal Reserve rate cuts amid heightened tensions” involving Iran and Israel as well as Ukraine, according to a Monday report from Saxo Bank A/S.
Meanwhile, figures for money managers’ net bullish gold bets hit a five-week low, according to weekly data from the Commodity Futures Trading Commission.
Spot gold rose 0.9% to $2,454.25 an ounce as of 10:50 a.m. in New York, after earlier gaining as much as 1.1% to the highest level in a week. The Bloomberg Dollar Spot Index climbed 0.1% after the yen fell more than 1%. Palladium, platinum and silver all advanced.