The gold metal at the opening of the Asian market session today traded weaker to $2,311 as the United States (US) dollar and treasury yields rose as investors await PCE inflation data on Friday this week.
This is because the data can provide an indication of interest rate cuts by the Federal Reserve (Fed) this year plus there is Gross Domestic Product (GDP) data on Thursday tomorrow.
According to Chicago Fed President Austan Goolsbee in an interview with CNBC two days ago, inflation needs to decrease further if the interest rate reduction that many people are waiting for is to be done.
Investors are now assessing inflation numbers and Fed speakers shortly after Canada's Consumer Price Index (CPI) was reported to have risen 2.9% year-on-year for May 2024, which was higher than the 2.9% recorded in April and exceeded the forecast of 2.6%.
Not only that, the Bank of Canada (BOC) core CPI which saw an annual increase of 1.8% has fueled concerns about continued inflationary pressures as well as alerting speculative interest to the risk of cutting interest rates too early.
So here it can be seen that the Fed is not yet at an appropriate level to cut interest rates, Fed Governor Michelle Bowman commented, adding that the labor market remains tight and only sees moderate progress on inflation this year.
While Governor Lisan Cook is of the view that the central bank is on track to reduce interest rates if the economic performance meets its expectations, but he still cannot predict when it will happen.
By observation, gold may maintain a bearish trend where the price may slip to $2,306 due to continued selling interest, but otherwise the price may bounce back.
