Gold prices edged lower on Thursday, retreating from monthly highs touched in the previous session as investors reacted to weak inflation data from China and hawkish signals from the Federal Reserve’s December meeting minutes.
By 4:25 pm AEDT (5:25 am GMT) spot gold prices were down by $2.42 or 0.1% to US$2,659.28 per ounce.
China's Consumer Price Index (CPI) inflation slowed to 0.1% year-on-year in December, down from 0.2% in November, while the Producer Price Index (PPI) contracted by 2.3%, a slight improvement from November’s 2.5% decline.
The figures aligned with expectations but highlighted weak domestic demand in the world's largest gold consumer, raising concerns about the effectiveness of Beijing’s stimulus measures.
In the United States, Fed minutes revealed concerns over persistent inflation and potential risks from President-elect Donald Trump’s proposed trade and immigration policies. These concerns prompted policymakers to adopt a cautious approach, slowing the pace of future rate cuts.
Market participants now turn focus toward a slew of speeches from Federal Reserve officials including Harker, Barkin and Bowman for clues on the central bank’s monetary policy trajectory.
Traders also remain watchful of Trump’s potential tariff plans, with CNN reporting that the president-elect is considering declaring a national economic emergency to implement new tariffs under the International Economic Emergency Powers Act (IEEPA).