Gold prices held firm in early trading on Monday after a series of record highs on the back of a slowdown in the US labor market and comments from the Federal Reserve, while traders awaited the US inflation report for fresh clues on when interest rates might be cut.
Spot gold was steady at $2,177.24 an ounce by 0602 GMT, while U.S. gold futures fell 0.1 percent to $2,183.90.
Gold hit a record high of $2,194.99 for the fourth straight day on Friday, after data showed a slowdown in the U.S. labor market.
“Gold is clearly in demand after large speculators increased their net exposure at the fastest weekly pace in 3.5 years on Tuesday,” said Matt Simpson, chief analyst at City Index.
He pointed out that prices will hold at high levels pending consumer price inflation data for February, due to be released tomorrow, Tuesday, as this is likely to be the biggest driver of gold prices throughout the week, given that the US Federal Reserve is currently in a period of silence.
Any reading showing a decline in the CPI would increase the chances of an early rate cut, supporting gold prices. US Federal Reserve Chairman Jerome Powell appeared more confident about cutting interest rates in the coming months during his testimony before Congress last week.
Lower interest rates enhance the appeal of the non-yielding precious metal.
Among other precious metals, spot platinum rose 0.1 percent to $913.16 an ounce, palladium was steady at $1,019.54 and silver was little changed at $24.30.
