Gold holds ground as slowing inflation boosts Fed rate cut bets
Fed Chair Powell speech due on Tuesday
Fed minutes of June policy meeting on Wednesday
Updates prices
By Ashitha Shivaprasad
July 1 (Reuters) -Gold prices held steady on Monday after data showed U.S. inflation subsided in May, bolstering hopes that the Federal Reserve will start cutting interest rates this year.
Spot gold XAU= was nearly unchanged at $2,325.49 per ounce, as of 0716 GMT. Prices registered a more than 4% gainin the second quarter.
U.S. gold futures GCcv1 eased 0.2% to$2,334.80.
Data on Friday showed that the U.S.personal consumption expenditures index increased 2.6% in the 12 months through Mayafter advancing 2.7% in April, whileinflation readings for the month were in line with economists' expectations.
"The latest U.S. inflation data remain fresh on investors' mind, with the data coming in line with consensus and generally did little to sway current market rate expectations for the Fed's easing process to kickstart in September," said IG market strategist Yeap Jun Rong.
But, "any failure to defend the $2,280 level ahead may potentially pave the way for gold prices to head towards the $2,200 next".
Market now expect a 64% chance of the Fed cutting interest rates in September , unchanged from before the data, as well as another cut in December. FEDWATCH
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Investor focus now shifts to remarks from Fed Chair Jerome Powell on Tuesday, followed by minutes from the Fed's latest policy meeting on Wednesday and U.S. labour market data later in the week.
Meanwhile, ANZ analysts in a note said that"although central bank purchases have slowed down in recent months, we believe emerging market's central banks will continue to diversify their reserves into gold."
Spot silver XAG= was flat at $29.12, platinum XPT= rose 0.3% to $996.12 and palladium XPD= gained 0.6% at $978.46.
Key metals consumer China's manufacturing activity grew at itsfastest pace in more than three years, a private sector survey showed. Thiscontrasts with an official PMI released on Sunday that showed a decline in manufacturing activity.
Spot gold price in USD per oz https://reut.rs/4csIrSf
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich, Janane Venkatraman and Sonia Cheema
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