Investing.com - Gold prices held steady on Friday as economic data did little to change expectations for rate cuts from the Federal Reserve and markets prepped for a meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
Spot gold inched up just 30 cents, virtually unchanged, to $1,410.26 by 9:25 AM ET (13:25 GMT), while gold futures for August delivery on the Comex division of the New York Mercantile Exchange, edged forward $1.25, or 0.1%, to $1,413.25 a troy ounce.
Data released Friday showed only a moderate pickup in consumer spending while inflation, excluding food and energy, held below the Fed’s target as forecast, doing little to change market expectations that it could cut rates at its next meeting in July.
Growing conviction that the Fed will move interest rates lower has supported prices of the non-yielding precious metal in June, up more than 8% on the month.
Financial markets meanwhile awaited the outcome of a meeting between Xi and Trump at the G20 summit at 11:30 AM (2:30 GMT) local time in Osaka, Japan on Saturday. That's 10:30 PM ET on Friday.
Rhetoric from the two sides this week has been sufficiently downbeat to limit markets' hopes to a truce that would postpone further increases in tariffs. New U.S. tariffs on imports from China are due to take effect next week.
ING economists said in a note that “it still looks as if things will get worse before they get better, meaning that any possible relief rally in risk assets after the G20 meeting may be short-lived,” a situation that could benefit safe-haven gold.
They indicated that resuming trade talks seems to be the best attainable result.
“But even then, there are too many bridges to be crossed for a smooth path towards a deal,” they said. “We think there will be another round of tariffs before the pain of the trade war forces both parties to strike a deal in the last quarter of this year.”
Investors have been buying gold and other haven assets to hedge risks from the trade battle between the world’s two biggest economies.
In other metals trading, silver futures dipped 0.1% to $15.283 a troy ounce by 9:28 AM ET (13:28 GMT).
Palladium futures fell 1.6% to $1,514.15 an ounce, while sister metal platinum jumped 1.1% to $826.50.
In base metals, copper was unchanged at $2.716 a pound.