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Gold prices dipped on Monday as investors awaited further US economic data. Reports from last week indicated that inflation was stabilizing, raising expectations that the Federal Reserve will cut interest rates later this year.
At 0546 GMT, spot gold was down 0.5% at $2,321.11 per ounce, following a more than 1% increase on Friday. US gold futures also fell 0.6% to $2,335.30, according to Reuters.
Kyle Rodda, a financial market analyst at Capital.com, stated, "Today's small move is probably just a little bit of an unwind of the move that we saw on Friday," and added that in the long run fundamentals are very constructive for gold, but are data-dependent.
Upcoming US economic data includes retail sales on Tuesday, weekly jobless claims on Thursday, and flash PMIs on Friday. Additionally, several Fed officials are scheduled to speak this week.
"With some signs of weakness emerging in the US economy, which could weaken the US dollar and also increase expectations of rate cuts going forward, gold is in a great position to take advantage," Rodda added.
Recent data suggested weakening price pressures in the US, indicating a loss of momentum in the labor market and keeping hopes alive for a September rate cut.
Traders are now anticipating a 68% probability of a cut in September, according to the CME Group’s FedWatch Tool, compared to 63% before the producer prices data on Thursday.
Minneapolis Fed President Neel Kashkari stated on Sunday that it's a "reasonable prediction" that the US central bank will cut interest rates once this year, possibly waiting until December to do so.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
In other metals, spot silver fell 1.4% to $29.13 per ounce, platinum was down 0.5% at $953.30 and palladium lost 0.1% at $889.21.
