Gold remains steady on Monday

Gold prices remained overall unchanged in the early European session, awaiting Feds meeting this week, which would shed some light into the centrals bank s future intentions regarding its Quantitative Easing. Gold prices rose on Friday, following U.S. data that spurred inflation concerns. Core PPI both on annual and monthly basis for May met expectations at 1.7% and 0.1% gain respectively. However, annual Producer Price Index surpassed projections of a 0.1% jump to reach 0.5%, well above April’s 0.6% increase reading. PPI on a monthly basis jumped to 0.5%, surpassing expectations of 0.1% and way above April’s 0.7% decrease. Unexpected rise of prices spurred concern about inflation, which immediately resulted in a jump of gold and oil prices as a hedging strategy against inflationary effects. Gold went above the $1 390 mark.

Also, the Preliminary University of Michigan Confidence mismatched expectations and fell to 82.7 for June. Economists expected the June reading to remain the same as May at 84.5, which was an almost six-year high when reported last month.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery marked a slight daily loss of 0.02%, standing at $1 387.35 at 7:33 GMT. The precious metal varied between daily high and low of $1 391.35 and $1 385.75 respectively.

Investors are now looking into this weeks Fed meeting and Ben Bernankes statement about the future of the monetary easing program. Gold lost 17% of its value so far this year after it fell into a bear market in April. Quantitative Easing has been one of the main sources of influence for gold pricing as the precious metal is used as a hedging strategy against inflation effects, which generally arise from such policies.

Sun Yonggang, a macroeconomic strategist at Everbright Futures Co. said for Bloomberg: “The market is unlikely to make any big moves before the Fed meeting as investors look for the next clue with regards to policy makers’ take on stimulus.”

Elsewhere on the precious metals market, silver, platinum and palladium were mixed, but also fairly unchanged on the day. Silver for July delivery lost 0.1% and stood at $21.932 at 7:31 GMT, ranging between daily high of $22.060 and low at $21.862 a troy ounce. Platinum July futures gained 0.14% to trade at $1 449.45, moving in range between $1 454 and $1 441.55 an ounce. Palladium for September delivery traded at $732.10 per troy ounce, marking a 0.5% rise.