Steady Gold Prices Eye $2,200: Awaiting CPI for Rate Cues

Gold prices stabilized just below record highs in Asian trade on Monday, as attention shifted primarily to the upcoming U.S. inflation data for further signals on when the Federal Reserve might initiate interest rate cuts.

Anticipations of rate cuts propelled bullion prices to soar sharply to record highs last week, particularly following remarks by Fed Chair Jerome Powell indicating that inflation was nearing levels the Fed found acceptable.

Middling labor market data, indicating a slight cooling in U.S. employment, further supported bullion prices. Weakness in the dollar and Treasury yields also contributed to the rise in bullion prices.

Spot gold increased by 0.1% to $2,180.47 an ounce, while gold futures expiring in April rose by 0.1% to $2,187.00 an ounce by 00:50 ET (04:50 GMT). Both instruments were trading just below the record highs reached on Friday.

Gold futures reached a lifetime high of $2,203.0 an ounce, while spot gold hit a lifetime high of $2,195.20 an ounce last week.

CPI data is in focus following mixed signals from the Fed and labor data

Attention has now shifted squarely to the U.S. consumer price index (CPI) data scheduled for release on Tuesday, which will provide further insights into interest rate trends.

The reading is anticipated to reveal a moderation in inflation through February, although inflation is still projected to stay well above the Fed’s 2% annual target.

U.S. inflation will be closely monitored this week, particularly after Powell and a series of Fed officials indicated that concerns about persistent inflation were the central bank’s primary consideration in adjusting interest rates.

The potential for lower rates has been the primary driver of gold prices over the past two weeks, particularly as labor data released on Friday also indicated a slowdown in employment growth.

While nonfarm payrolls increased more than anticipated in February, the unemployment rate also rose, and payroll figures for January were revised significantly lower.

Other precious metals remained subdued on Monday but were still holding onto substantial gains from last week. Platinum futures edged up by 0.2% to $919.40 an ounce, while silver futures dipped slightly by 0.1% to $24.517 an ounce.

Copper prices remained rangebound amid mixed data from China

Among industrial metals, copper futures expiring in May stabilized at $3.8957 a pound on Monday, in line with moderate economic signals from China, the top importer.

Data released last week indicated that China’s copper imports increased during the first two months of the year. However, the pace of growth remained sluggish, particularly as factory activity in the country continued to face challenges.

This notion was reinforced by the inflation data released over the weekend. While consumer inflation expanded slightly more than anticipated, producer inflation continued to slide deeper into deflationary territory. This trend suggests that factory activity, a crucial driver of Chinese copper demand, remained subdued.

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