Gold prices eased on Friday, but were set for a third straight quarterly rise, while investors look forward to US inflation data due later in the day for more clarity on the Federal Reserve’s interest rate-cut timeline.
Spot gold was down 0.3% at $2,321.18 per ounce, as of 0354 GMT.
Prices have gained about 4% for the quarter.
US gold futures fell 0.2% to $2,331.90.
“Gold is up on the quarter, largely as the scope for monetary easing in the US has increased … China also bought large amounts of gold for their reserves, which helped offer support in the second quarter,” said Ilya Spivak, head of global macro at Tastylive.
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After adding to its gold reserves for 18 consecutive months, official data from the People’s Bank of China (PBOC) showed its holdings were flat in May.
A survey by the World Gold Council, however, found that more central banks may increase gold reserves within 12 months. Gold rose more than 1% in the previous session after data showed a continued, though moderate, slowdown in US economic activity.
Currently, the market sees a 64% chance of a first Fed cut in September, according to the CME FedWatch tool.
However, Fed Governor Michelle Bowman reiterated on Thursday that she is not ready yet to support a central bank rate cut with inflation pressures still elevated.
The US personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred inflation measure – is due at 1230 GMT.
A soft set of (PCE) figures is required to keep hopes of Fed easing alive and further support gold, City Index senior analyst Matt Simpson said.
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