Gold prices showed minimal movement in Asian trading on Monday, failing to recover from recent declines as traders continued to factor in expectations of higher U.S. interest rates ahead of a Federal Reserve meeting scheduled for later this week.
The precious metal had retreated from record highs reached earlier in April, with safe-haven demand easing amid a lack of escalation in tensions between Iran and Israel. This lack of geopolitical catalysts left gold susceptible to outflows amid tightening U.S. monetary policy.
Spot gold stabilized around $2,334.66 per ounce, while gold futures expiring in June remained flat at approximately $2,345.60 per ounce by 01:10 ET (05:10 GMT).
Investors were focused on the upcoming Federal Reserve meeting following a surprising reading on the Personal Consumption Expenditures (PCE) price index, the Fed‘s preferred measure of inflation. The stronger-than-expected inflation data, coupled with a relatively robust dollar, weighed on gold prices.
Amid signs of persistent U.S. inflation, market expectations for early rate cuts by the Fed have diminished. The central bank is now anticipated to begin reducing rates in September or possibly in the fourth quarter.
Higher interest rates for an extended period are generally unfavorable for gold, as they increase the opportunity cost of holding the precious metal. Despite recent declines, gold prices remained positive for the year, driven by ongoing concerns that elevated interest rates could impede global economic growth.
In contrast, other precious metals saw mild gains after experiencing significant losses over the past two weeks. Platinum futures rose by 0.6% to $930.05 per ounce, while silver futures increased by 0.3% to $27.613 per ounce.
