The price of gold rose by about 0.4%, helped by the weakening of the US currency. Investors are also preparing for the release of US CPI data, which could affect the outlook for Fed monetary policy.
The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.18% to 104.86, making greenback-priced bullion more attractive for other currency holders.
As for the data, the June US CPI report will be published at 12:30 GMT. Experts said that any downside surprise in the CPI report could weaken the dollar and give an additional boost to gold. The CPI is expected to have increased by 0.1% m/m in June, which corresponds to an increase of 3.1% year-on-year. The core CPI, according to forecasts, increased by 0.2% compared to May and by 3.5% per annum.
Yesterday, Fed Chairman Powell said that the Fed would make interest rate decisions “when and as” they were needed. According to the CME FedWatch Tool, markets see a 4.7% probability of a 25 basis point rate cut at the Fed meeting in July, a 71.4% probability of a rate cut in September, and a 85.1% probability of monetary policy easing in November.