Gold moves in a positive zone ahead of US spending data

Gold prices inched up in European trade on Friday on track for the second straight profit, moving away from three-week lows and heading for the fourth monthly profit in a row.

The gains are underpinned by the lower US 10-year treasury yields ahead of crucial US personal spending data, the Fed’s favorite inflation gauge. 

Such data will provide fresh pricing for the odds of Fed rate cuts this year.

Prices 

Gold prices rose 0.2% today to $2347 an ounce, with a session-low at $2337.

Prices rose 0.25% on Thursday away from three-week lows at $2322. 

Monthly Trades

Gold is down 2.7% so far in May on track for the fourth monthly profit in a row.

The precious metal marked a record high on May 20 at $2450 an ounce as major investment funds buy up the metal.

The gains were also boosted by the weaker dollar and US treasury yields following forecast-missing US growth and inflation data, which boosted the odds of two Fed rate cuts this year.

US Yields 

US 10-year treasury yields fell 0.3% today away from four-week highs at 4.638%, underpinning non-yielding assets such as gold. 

US Rates

The market odds of a Fed 0.25% rate cut in September stand at 51%, and a 64% for a November rate cut.

According to the Fedwatch tool, investors now expect a single Fed interest rate cut in 2024. 

US Personal Spending Data

Investors await important US personal spending data, which the Fed relies on heavily to measure the path of inflation. 

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 532.21 tonnes, the lowest since May 10.