Gold steady as traders await US inflation data; Palladium slide

• Markets are awaiting US CPI data on Wednesday
• Gold could fall below $1,900 if inflation stays high – analyst
• Palladium is down about 33% so far this year

July 10 (Reuters) – Gold was little changed on Monday as investors awaited US inflation data that could influence the Federal Reserve’s monetary policy stance, while palladium prices slipped below $1,200 for the first time since December 2018 per ounce fell.

Spot gold price was steady at $1,923.59 per ounce as of 10:10 am EDT (1410 GMT). US gold futures lost 0.2% to $1,928.60.

“Gold has strong chart support at $1,900. If inflation stays high, gold could push below this level and prices could quickly fall to the $1,848 level,” said Jim Wyckoff, senior analyst at Kitco.

The focus this week will be on US CPI (Consumer Price Index) data, which are expected on Wednesday after last week’s Fed minutes showed a large majority of policymakers expected further monetary tightening.

Higher interest rates weaken the attractiveness of gold, which does not pay interest.

Precious metals prices are down more than 7% since hitting near record levels in early May as investors scaled back expectations of an end to the Fed’s rate-hiking cycle.

“The technical situation remains bearish for the gold market. I think it takes a geopolitical spark to drive prices significantly higher,” Wyckoff said.

The Labor Department’s jobs report on Friday showed that the US economy added the fewest jobs in two and a half years in June, but continued strong wage growth suggested labor market conditions are still tight.

Meanwhile, palladium fell 2.9% to $1,208.78 an ounce after hitting a session low of $1,190.65.

Palladium is down nearly 33% so far this year as the surge in electric vehicles threatens to squeeze demand for the autocatalyst metal amid broader economic weakness.

“If interest rates continue to rise as futures markets are predicting, they will likely feel the pain point from U.S. consumers and selling is likely to slow, which would weigh on palladium demand over the next 12 months,” Heraeus analysts wrote in a note.

Silver was flat at $23.05 while platinum was up 1.5% at $921.81.

Reporting by Ashitha Shivaprasad and Brijesh Patel in Bengaluru; Edited by Nick Macfie

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