GOLD prices edged lower on Monday (Jul 17) as the dollar strengthened, while investors largely bet on the US Federal Reserve hitting the brakes soon on interest rate hikes.

Spot gold edged 0.1 per cent lower to US$1,952.58 per ounce by 0028 GMT. US gold futures were down 0.4 per cent to US$1,957.20.

The US dollar edged up slightly above its April 2022 lows, making gold more expensive for holders of other currencies.

Bullion gained 1.6 per cent for the week to Jul 14, its biggest weekly rise since April, on expectations that the Fed was close to ending its monetary tightening cycle.

Data in the US last week hinted at a disinflationary trend – consumer prices grew at their slowest pace in more than two years, producer inflation saw the smallest increase in nearly three years, and consumer sentiment jumped to the highest level in nearly two years.

Interest rate futures showed markets mostly priced in another rate hike from the Federal Open Market Committee (FOMC) at its Jul 25-26 meeting, with rate cuts seen in 2024.

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Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

However, Fed governor Christopher Waller on Thursday said he was not ready to call an all-clear on inflation and favours rate hikes this year – the sentiment reflected in June’s FOMC minutes.

A raft of Chinese economic indicators will be released on Monday, which is expected to show the post-pandemic bounce is fizzling out, raising expectations of more stimulus measures.

Spot silver fell 0.2 per cent to US$24.89 per ounce, while platinum and palladium fell 0.5 per cent each to US$966.88 and US$1,265.07, respectively. REUTERS