US consumer price data is expected to be released on Wednesday.
Ajay Kedia, director of Kedia Commodities in Mumbai, said that if the inflation report is released in a way that fuels fears of another rate hike in June, gold prices could eventually fall to a level between 1950 and 1920 dollars.
Bullion is a hedge against inflation, but a high interest rate affects the attractiveness of non-yielding assets.
Dealers are currently betting 92% that the US central bank will keep interest rates at their current level in June.
The New York Federal Reserve report showed that inflation expectations for US consumers were mixed in April.
Apart from economic data, market participants are also watching developments surrounding the US banking sector and the debt ceiling.
Fed survey data released on Monday showed the latest indication that the central bank’s interest rate hike is starting to bear fruit in the financing sector.
Kedia added, “If there is any news of more pressure in the banking sector, we will see gold move towards the $2,100 level.”
Treasury Secretary Janet Yellen said on Monday that Congress’ failure to raise the federal debt ceiling by $31.4 trillion would deal a heavy blow to the US economy and weaken the dollar’s position as a currency. global reserve.
Prices change
Spot gold prices were unchanged at $2,023.41 an ounce at 0232 GMT, while U.S. gold futures fell 0.2% to 2,030.10 dollars.
As for other precious metals, silver rose 0.2% in spot trades to $25.61 an ounce.
Platinum also rose 0.2% to $1,073.23 and palladium fell 0.3% to $1,548.58.
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