Gold drifts lower as traders ahead of US inflation data

Shafaq News/ Gold prices eased on Tuesday, while investors looked toward key U.S. inflation data due later this week that could throw some light on the Federal Reserve's interest rate cut stance.

Spot gold was down 0.2% at $2,327.52 per ounce as of 0339 GMT. U.S. gold futures fell 0.2% to $2,339.90.

"Technical factors in the short-term are not so positive for gold. After last Friday's sell-off, short-term traders view this as a bearish signal explaining the lackluster movement for gold holding on to these levels," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.

Bullion dropped more than 1% on Friday as the dollar jumped after U.S. business activity crept up to a 26-month high in June amid a rebound in employment.

First-quarter U.S. gross domestic product (GDP) estimates are due on Thursday and the personal the consumption expenditures (PCE) price index report on Friday.

If the actual number for the core PCE comes in strong, it is potentially not a rosy news driver for gold and could actually see gold break below the $2,300 level, Wong added.

Lower rates reduce the opportunity cost of holding non-yielding bullion.

San Francisco Fed Bank President Mary Daly on Monday said she does not believe the U.S. central bank should cut rates before policymakers are confident that inflation is headed toward 2% but also noted that rising unemployment is increasingly a risk.

Other Fed officials speaking this week include Fed Governors Lisa Cook and Michelle Bowman along with Richmond Fed President Tom Barkin.

Elsewhere, spot silver fell 0.5% to $29.47 per ounce, platinum rose 0.5% to $999.70.

Palladium gained 1.5% to $993.83 after hitting a one-month high on Friday.

(Reuters)