Gold prices were steady in early Monday trading, after falling 1 percent in the previous session, as U.S. inflation data suggested the Federal Reserve was likely to cut interest rates less than expected this month.
Update prices
Spot gold was steady at $2,502.89 an ounce by 0015 GMT, after hitting a session low of $2,494.15 on Friday. However, gold posted monthly gains in August.
US gold futures rose 0.3 percent to $2,535.
U.S. consumer spending rose strongly in July, data showed Friday, contradicting the Federal Reserve’s half-percentage-point interest rate cut this month. The personal consumption expenditures price index rose 0.2 percent last month, in line with expectations, after an unrevised 0.1 percent gain in June.
Non-yielding gold prices tend to rise when interest rates are low.
The U.S. central bank is expected to begin its rate-cutting cycle at its policy meeting on Sept. 17-18. Traders currently see a 67 percent chance of a 25 basis point rate cut this month and a 33 percent chance of a 50 basis point cut, according to the CME FedWatch tool.
Among other precious metals, spot silver rose 0.2 percent to $28.89 an ounce, platinum was almost flat at $926.80 an ounce, and palladium rose 0.3 percent to $968.18 an ounce, according to Reuters data.
