Gold prices edged lower on Monday but remained anchored above the $4,000 level, as traders tempered expectations of a Federal Reserve rate cut in December and awaited a backlog of key US economic data.
By 4:05 pm AEDT (5:05 am GMT), spot gold was down 0.5% at US$4,044.07 per ounce, easing after a more than 2% rise the previous week.
Market focus has shifted to the delayed September producer price index (PPI) and retail sales figures, both due on Tuesday (Wednesday AEDT), which could influence expectations for the Fed’s policy path.
New York Federal Reserve President John Williams reiterated on Friday that the central bank could still cut rates “in the near term” without compromising progress on inflation.
According to the CME Group FedWatch Tool, traders are now pricing in a 69.3% chance of a rate cut at the December meeting, up sharply from 40% a week ago.
Traders will closely watch Tuesday’s producer price index (PPI) and retail sales reports for clearer signals.
Markets are expecting headline PPI to rise 0.3% month-on-month in September, while retail sales are forecast to increase 0.4%.
Any indication of hotter inflation could weaken prospects for a December cut, potentially lifting the U.S. dollar and weighing further on gold.
