GOLD prices were flat in early Asian trading on Tuesday (May 4) after a sharp gain in the previous session, as investors strapped in for US economic data due later in the week that could offer more clues to the Federal Reserve’s interest rate path.
Spot gold was unchanged at US$2,347.48 per ounce, as at 0124 GMT, after a 1 per cent gain on Monday. US gold futures edged down 0.1 per cent to US$2,367.70.
The US dollar index ticked down about 0.1 per cent against a basket of currencies, making bullion more attractive for foreign currency holders.
Data showed US manufacturing activity slowed for a second straight month in May, and US construction spending fell unexpectedly for a second consecutive month in April on declines in non-residential activity.
Investors await the ADP employment report on Wednesday and non-farm payrolls data on Friday to gauge the US economy’s health and if it will deter the Fed from cutting rates in September.
Traders are currently pricing in about a 60 per cent chance of a Fed rate cut in September, according to CME FedWatch tool.
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Lower interest rates cut the opportunity cost of holding non-yielding bullion.
The Federal Reserve Bank of New York said that underlying inflation pressures eased slightly in April.
A survey carried out by a think tank found that global central banks planned to continue to increase their exposure to gold, a trend that has already helped the precious metal hit record highs this year.
Spot silver fell 0.4 per cent to US$30.63 per ounce, platinum was up 0.7 per cent at US$1,018.35 and palladium gained 1.3 per cent to US$929.38. REUTERS
