Higher As Attention Turns To Wednesday's US CPI Data

Gold is slightly weaker in the Asia-Pac session, after closing +0.7% at $1926.05 on Friday, boosted by a weaker USD following the US payrolls report.

• Non-farm payrolls increased 209k which was marginally less than the 225k expected but there were large downward revisions of 110k to previous months. US tsys gapped higher initially after the data dropped but reversed support as attention turned to the unemployment rate falling back to 3.6%, from 3.7% in May, and wage growth printing stronger than expected, rising 4.4% on an annual basis.
• Traders are currently anticipating the release of inflation data scheduled for Wednesday, which will greatly influence expectations regarding the next actions of the Federal Reserve.
• According to forecasts, the inflation report is expected to reveal a 3.1% increase in the CPI compared to the previous year, marking the smallest rise since March 2021. This is primarily attributed to the decrease in gasoline prices. Core CPI, excluding volatile items, is predicted to show a year-on-year increase of 5.0%, slightly lower than the previous reading of 5.3%.
• Despite these figures, the majority of traders still anticipate another interest rate hike by the Fed later this month, which could reduce the attractiveness of non-interest-bearing gold.