Gold prices retreated on Monday after data from the Chinese government showed that the country continued its pause in buying yellow metal for a second straight month. Meanwhile, bullion investors eyed Federal Reserve Chairman Jerome Powell’s upcoming testimony before Congress this week and June’s Consumer Price Index inflation data to support market hopes of an interest rate cut.
Data released Sunday from China, the world’s largest gold buyer, showed its gold reserves remained unchanged for a second straight month in June after 18 consecutive months of purchases. Figures showed its reserves still holding at 72.8 million ounces with a value of nearly $170 billion. Some analysts believed the country would resume its gold purchases in June to take advantage of lower prices after May’s record highs.
After its bull run to close out last week, gold was down $26.89 late Monday morning at $2,361 per ounce. Silver, meanwhile, also slipped into negative territory and was down $0.35 at $30.76 per ounce.
Even with the price pressures, several key developments this week could help gold prices get back on track. Fed chief Jerome Powell is scheduled to testify before Congress on Tuesday and Wednesday, and June’s Consumer Price Index inflation data will be released on Thursday.
Last week, a series of reports exposing a softer than expected U.S. economy – including an unexpected rise in the unemployment rate – boosted gold and silver and renewed market confidence of a September rate cut.
An analysis published Monday by banking and financial services firm ING maintains that several geopolitical and macroeconomic drivers will support gold’s record-breaking rally through the end of the year, such as war in the Middle East and Ukraine, the runup to the U.S. presidential election and anticipation of the Fed finally moving to cut interest rates after a long wait.
Gold Price Chart
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