Gold Holds Steady After US Inflation Data
Gold inched higher on Monday and was on course for its biggest monthly jump since July 2020 as signs of rising inflation in the U.S. boosted the precious metal’s appeal as inflation hedge.
Spot gold edged up 0.1 percent to $1,905.35 an ounce to extend its gains this month by nearly 8 percent. U.S. gold futures were up 0.1 percent at $1,908.05.
The dollar nursed losses at a three-year low against the Chinese yuan after data showed China’s factory activity growth slowed slightly in May.
Inflation worries persist after a key gauge of inflation accelerated in April, well above the U.S. Federal Reserve’s 2 percent annual rate target.
Data from the Commerce Department showed on Friday that U.S. core personal consumption expenditures index, the Federal Reserve’s key gauge of inflation, rose more-than-expected in April.
Core PCE price index grew 3.1 percent year-on-year in April following a 1.8 percent increase in March. The rate was forecast to rise to 2.9 percent.
On a monthly basis, core PCE grew 0.7 percent in April after a rise of 0.4 percent in the previous month. Economists had forecast a 0.6 percent rise.
Key economic data due this week include ISM manufacturing index on Tuesday and ADP private sector employment, initial jobless claims data and ISM services PMI on Wednesday. Friday features all important nonfarm payrolls data.
U.S President Joe Biden on Friday unveiled $6 trillion budget for next year, which proposes spending on infrastructure, education and other initiatives.
But the budget plan is unlikely to get bipartisan support in the Senate, as Republicans criticized that Biden’s budget will add to the deficit and debt.
U.S. markets are closed today on account of the Memorial Day holiday.
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