Gold steady as markets strap in for inflation data

Gold prices were flat in early Asian trading on Monday, with market participants bracing for key US inflation data this week that could offer fresh clues on the Federal Reserve's next interest rate move.

Fundamentals

Spot gold steadied at $4,200.23 per ounce by 0010 GMT after hitting a one-week high on Friday. US gold futures for December delivery gained 0.2% at $4,225.50.

Key data due this week include the US Consumer Price Index (CPI) report on Wednesday, followed by the Producer Price Index (PPI) and retail sales data on Thursday.


In September, the US central bank hiked interest rates by 25 basis points. Traders are currently assigning an 18% probability to a rate hike in October, while pricing in an 84% chance of an increase by December, according to CME's FedWatch tool.

While gold is known as a hedge against inflation, higher interest rates reduce its attractiveness relative to yield-bearing assets.

US consumer sentiment slumped further in early October as the rising cost of living because of the Middle East conflict soured households' views of the economy.

Global economic growth will likely slow to 2.6% in 2026, down from 2.9% last year, as the energy shock from the crisis in the Middle East is putting the global economy to the test, the United Nations agency for trade and development said on Friday.

Gold demand in India was sluggish last week, while trading in top consumer China was subdued during the holiday-truncated trading period.

Among other metals, spot silver rose 0.5% to $61.08, platinum added 0.4% to $1,693.51 and palladium climbed 0.7% to $1,155.84.

Data/Events (Gmt)

0800 China Total Social Financing Sep

0800 China M2 Money Supply YY Sep

0800 China New Yuan Loans Sep