Gold flat as dollar, yields firm; investors seek more US data

Gold prices were flat on Wednesday as the dollar and Treasury yields held firm ahead of a key inflation reading due later this week, which could provide more clarity on the Federal Reserve‘s interest rate path.

FUNDAMENTALS

* Spot gold was unchanged at $2,319.14 per ounce, as of 0128 GMT. U.S. gold futures were flat at $2,331.00.

* The dollar rose 0.1% against its rivals, making gold more expensive for other currency holders, while benchmark 10-year yields also edged higher.

* The euro, once considered a competitor to the dollar’s international role, was weakening as an alternative currency, with those looking to reduce their risk exposure turning to gold instead, a report showed. * This week, traders are looking forward to the U.S. first-quarter gross domestic product estimates due on Thursday and the personal consumption expenditures (PCE) price index report on Friday to get more cues on the timing and scale of possible rate cuts this year. * U.S. consumer confidence eased in June amid worries about the economic outlook, but households remained upbeat about the labour market and expected inflation to moderate over the next year. * Federal Reserve Governor Lisa Cook said on Tuesday the U.S. central bank is on track for a rate cut if the economy’s performance meets her expectations, but she declined to say when the Fed will be able to act.

* Traders are currently pricing in about a 65% chance of a rate cut in September, according to CME FedWatch Tool.

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

* Platinum-group metals producer Sibanye Stillwater may close a metals streaming, or prepayment, deal to raise the cash it needs to boost its balance sheet in the third quarter.

* Spot silver fell 0.1% to $28.90 per ounce, platinum rose 0.4% to $985.83 and palladium lost 0.8% to $940.60.

DATA/EVENTS (GMT) 1000 France Unemp Class-A SA May 1400 US New Home Sales-Units May.