Gold prices edged higher on Monday, approaching US$3,350 during Asian trade as market participants awaited a high-profile meeting between United States President Donald Trump and Ukrainian President Volodymyr Zelenskyy.
By 3:50 pm AEST (5:50 am GMT), spot gold prices were up $12.79 or 0.4% to US$3,348.16 per ounce.
Stronger-than-expected U.S. economic data last week weighed on the yellow metal. The producer price index (PPI) rose 3.3% year-on-year in July, exceeding forecasts of 2.5% and up from 2.4% in June.
Retail sales for July increased 0.5% month-on-month, in line with expectations but below June’s revised 0.9% gain, indicating continued strength in consumer spending.
These data points dampened expectations of aggressive Federal Reserve rate cuts in September, creating a headwind for gold.
However, ongoing geopolitical uncertainty, particularly surrounding Ukraine, is likely to sustain safe-haven demand and cap gold’s downside.
Reports emerged on Monday that U.S. special envoy Steve Witkoff confirmed Trump and Russian President Vladimir Putin had reached agreements on Ukraine security guarantees, though the deal fell short of allowing Ukraine NATO membership due to Russian objections.
Market participants are now closely watching the Trump-Zelenskyy meeting for fresh developments, which could provide new direction for gold prices in the near term.
