Gold steady as markets strap in for US inflation data

BENGALURU: Gold prices were flat in early Asian trading on Monday, as market participants braced for key US inflation data this week that could offer fresh clues on the Federal Reserve's next interest rate move.

Spot gold steadied at US$4,200.23 per ounce by 0010 GMT after hitting a one-week high on Friday. US gold futures for December delivery gained 0.20 per cent to US$4,225.50.

Key data due this week include the US Consumer Price Index (CPI) report on Wednesday, followed by the Producer Price Index (PPI) and retail sales data on Thursday.

In September, the US central bank raised interest rates by 25 basis points. Traders are currently assigning an 18 per cent probability to a rate hike in October, while pricing in an 84 per cent chance of an increase by December, according to CME's FedWatch tool.

While gold is known as a hedge against inflation, higher interest rates reduce its attractiveness relative to yield-bearing assets.

US consumer sentiment slumped further in early October as the rising cost of living caused by the Middle East conflict soured households' views of the economy.

Global economic growth will likely slow to 2.60 per cent in 2026, down from 2.90 per cent last year, as the energy shock from the Middle East crisis puts the global economy to the test, the United Nations agency for trade and development said on Friday.

Gold demand in India was sluggish last week, while trading in top consumer China was subdued during the holiday-shortened trading period.

Among other metals, spot silver rose 0.50 per cent to US$61.08, platinum added 0.40 per cent to US$1,693.51 and palladium climbed 0.70 per cent to US$1,155.84.