Gold prices fell 0.3% after jumping 1.48% yesterday to reach their highest level since April 19 amid an increased likelihood of a Fed interest rate cut in September.
Today's price decline is due to partial profit-taking, as well as the correction of positions by investors ahead of the publication of US economic data.
Meanwhile, the US dollar consolidated against major currencies, remaining near a 5-week low, while 10-year bond yields fell to their lowest level in more than a month. However, experts warned that a potential recovery in the dollar or Treasury bond yields could be the most serious obstacle to gold prices in the rest of the week.
The slowdown in US consumer inflation, along with the weak employment report for April, was good news for Fed policymakers, who are waiting for renewed progress in fighting inflation before lowering borrowing costs. Today, investors will focus on housing market data (building permits and housing starts), initial jobless claims report, as well as statistics on industrial production. According to forecasts, building permits and housing starts rose sharply in April - to 1.48 million and 1.41 million, respectively, while initial jobless claims fell to 220 thousand last week from 231 thousand a week earlier. Economists also expect industrial production growth to slow to 0.1% m/m in April from 0.4% m/m in March.