Gold steady after record run as US inflation data looms

Gold prices held steady on Monday after hitting a series of record highs last week while investors awaited US inflation data for insights into the US rate cut timeline.

Spot gold was little changed at $2,180.75 per ounce, as of 0956 GMT after scaling a record of $2,194.99 for the fourth consecutive session on Friday as data indicated the US labour market was slowing.

US gold futures were steady at $2,186.60.

“Gold continues to shine on expectations around the Fed cutting interest rates this year. Market could be waiting for the incoming US inflation data,” said FXTM senior research analyst Lukman Otunuga.

The US consumer price inflation (CPI) data for February is due on Tuesday.

“Should the CPI print be hotter-than-expected, this could hit expectations around Fed rate cuts - weakening gold as a result. A cool report is likely to boost appetite for the zero-yielding metal,” Otunuga said.

Traders are pricing in a more than 70 per cent chance that the Fed could start cutting interest rates by June, according to the CME FedWatch tool.

Reflecting bullish sentiment, COMEX gold speculators raised their net long positions by 63,018 contracts to 131,060 in the week ended March 5, data on Friday showed.

“With large speculators having increased net-long exposure at their fastest weekly pace in 3.5 years last Tuesday, gold is clearly in demand and not a market to short for any length of time whilst traders expect Fed cuts,” City Index senior analyst Matt Simpson said.