Gold prices stabilize ahead of U.S. inflation data amid ongoing recession fears.

Hedge funds cut bullish bets on the metal to the lowest level in 5 weeks.

Gold prices stabilized ahead of important U.S. data this week,
as traders focused on bets that the Federal Reserve might soon shift to monetary easing.

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The metal was traded near $2,430 per ounce in Asia after it fell by 0.5% last week, as markets prepared for the release of the Consumer Price Index (CPI) report on Wednesday. The July reading is expected to rise by 0.2% compared to June.

This is unlikely to divert the central bank from its widely anticipated path of lowering interest rates next month, as it also considers the need to avoid recession risks.

Federal Reserve Governor Michelle Bowman said on Saturday that she still sees upside risks to inflation and continued strength in the labor market. Higher borrowing costs are typically negative for the precious metal, as it does not yield returns.

Hedge funds trading on the COMEX futures exchange reduced their bullish bets on gold to the lowest level in five weeks in the week ending August 6, according to the latest data from the Commodity Futures Trading Commission.

The precious metal has risen by about 18% this year and remains close to last month’s record high. In addition to the anticipated rate cuts, the metal has also been supported by strong central bank purchases, robust demand from Chinese consumers, and increased safe-haven buying due to conflicts in the Middle East and Ukraine.

Spot gold was little changed at $2,429.41. The Bloomberg Dollar Spot Index was steady.
Silver declined, while palladium and platinum were flat.

Gold prices stabilize ahead of U.S. inflation data

Gold prices stabilize ahead of U.S. inflation data

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