“Inflationary concerns will dominate the focus this week, but the base effects are widely priced in and this upcoming reading will likely only serve as a baseline,” said Edward Moya, senior market analyst at Oanda Corp. “Gold prices seem content consolidating, but the next move still seems like it will be higher.”
Bullion posted the biggest weekly gain since November last week after a report showed a surprise slowdown in U.S. job growth, supporting the case for continued economic stimulus and low interest rates. Traders will be watching for the U.S. CPI report due Wednesday, which is forecast to show prices continued to increase in April.
Spot gold was little changed at $1,835.51 an ounce by 8:09 a.m. in Singapore after climbing as much as 0.8% to $1,845.51 on Monday, the highest since Feb. 11. Silver and platinum steadied, while palladium dropped. The Bloomberg Dollar Spot Index was flat.
The U.S. labor market should continue to make a “strong” recovery despite its weaker-than-expected performance last month, said Federal Reserve Bank of Dallas President Robert Kaplan, because consumer demand remains robust.
His confidence on the outlook for the job market was echoed by San Francisco Fed chief Mary Daly and Chicago Fed President Charles Evans, with the latter adding that the U.S. central bank will need to remain accommodative “until we really get nervous that inflation is just in excess of averaging 2% over time.”