Gold steady as investors await US economic data

Gold prices held steady on Monday as investors awaited a slew of U.S. economic data due out this week for guidance on the Federal Reserve’s interest rate stance.

FUNDAMENTALS

* Spot gold was steady at $2,639.56 per ounce, as of 0034 GMT. U.S. gold futures fell 0.1% to $2,652.00.

* Market focus is on the U.S. jobs report, due on Friday. The data could provide more clues to the Fed’s interest rate plans after the U.S. central bank last month rattled markets by reducing its projected rate cuts for 2025.

* Investors are also awaiting data on ADP hiring and job openings, as well as minutes of the Fed’s last policy meeting. * Gold flourishes in a low-interest-rate environment and serves as a hedge against geopolitical uncertainties and inflation.
* U.S. President-elect Donald Trump is set to return to office on Jan. 20 and his proposed tariffs and protectionist policies are expected to fuel inflation.
* This could prompt the Fed to go slow on rate cuts, limiting gold’s upside. After three rate cuts in 2024, the Fed has projected only two reductions for 2025 due to persistent inflation.
* The U.S. central bank’s benchmark policy rate should stay restrictive until it is more certain that inflation is returning to its 2% target, Richmond Federal Reserve President Thomas Barkin said on Friday.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.17% to 871.08 tonnes on Friday from 872.52 tonnes on Thursday.

* Gold discounts in India remained steady last week as elevated prices kept buyers away, while Chinese dealers charged higher premiums in anticipation of stronger demand ahead of the upcoming Chinese New Year.

* Spot silver rose 0.1% to $29.64 per ounce, platinum was down 0.7% at $931.70, and palladium shed 0.4% to $918.63.