Gold maintains its value as Fed rate-cut bets are boosted by slower inflation

As of 0202 GMT, spot gold was up 0.1% at $2,327.12 an ounce. In the second quarter, prices increased by almost 4%.

As reports indicated that U.S. inflation decreased, gold prices remained stable on Monday, supporting expectations that the Federal Reserve would begin reducing interest rates this year.

As of 0202 GMT, spot gold was up 0.1% at $2,327.12 an ounce. In the second quarter, prices increased by almost 4%.

At $2,336.60, US gold futures saw a 0.1% decrease.

The personal consumption expenditures index rose 2.6% on Friday, according to data, after a 2.7% gain in April. The inflation figures for May were expected by economists.

"The latest U.S. inflation data remain fresh on investors' mind, within the data coming in line with assumption and generally did little to sway current market rate projections for the Fed's easing process to kickstart in September," Yeap Jun Rong, a market analyst at IG,

nonetheless, "any failure to defend the $2,280 level ahead could easily smooth the way for gold prices to head towards the $2,200 next" .

The CME FedWatch tool indicates that traders are pricing in a 63% possibility of a first rate drop in September. The opportunity cost of owning non-yielding bullion is decreased by lower interest rates.

The words made by Fed Chair Jerome Powell on Tuesday, the minutes from the Fed's most recent policy meeting on Wednesday, and the labor market statistics for the United States later this week will all be of interest to the market.

"Uncertainties related to inflation, growth in the economy, U.S. election and geopolitics should continue to support a sense of security demand for gold," ANZ said in its quarterly report.

"Although central bank acquisitions have slowed down in recent months, we believe underdeveloped market's central banks are going to still diversify their reserves into gold."

Spot silver remained unchanged at $29.12 an ounce, palladium crept up 1.1% to $982.62, while platinum dropped 0.2% to $990.90.

Important metals buyer According to an official survey, China's services activity stagnated in June while industrial output declined for a second consecutive month.