Key points
Spot gold was down 0.1% at $2,380.31 per ounce, as of 0156 GMT. U.S. gold futures were little changed at $2,377.30.
See: Gold trading at 2383.15 on the VT Markets app.
The Federal Reserve is expected to hold rates steady at the end of its two-day meeting starting later today. However, the Fed might signal policy easing as early as September by acknowledging that inflation has edged closer to its 2% target.
Investors will also keep an eye on a series of employment data scheduled for release this week, with the main focus on the nonfarm payrolls report due on Friday. This data will be crucial in determining the Fed’s next move.
Any hint of easing from the Fed or weak employment data could weaken the U.S. dollar, potentially boosting gold prices above $2,400 per ounce. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
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The Bank of England and the Bank of Japan are also holding policy meetings this week. The outcomes of these meetings could impact global market sentiment and influence gold prices.
Among other metals, spot silver fell 0.6% to $27.69 per ounce. If silver prices remain above $25 for the rest of the year, it is unlikely that Indian imports will significantly increase, except for occasional surges during price dips. This could lead to a contraction in Indian jewellery and silverware fabrication demand for the second consecutive year.
Platinum was flat at $948.55, while palladium dipped 0.7% to $897.50.
Gold’s movement will closely depend on the Fed’s tone and the upcoming jobs report. If the Fed hints at rate cuts and the employment data is weak, gold could see a surge past $2,400. However, a stronger dollar resulting from a lack of clear signals from the Fed could keep gold prices subdued.
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