Gold was steady after rising 0.7% on Monday as data showed weaknesses in the US economy, increasing speculation that the Federal Reserve is set to pause its rate-hike cycle.

Bullion investors are again focused on US monetary policy following the resolution of the debt-ceiling standoff. Treasury yields and the dollar fell on Monday after figures showed the US service sector almost stalled in May as orders dried up, while a measure of prices paid slid to a three-year low.

That bolstered views that the Fed will hold rates steady in June, while staying open to more hikes if needed to further cool inflation. Higher rates are generally negative for non-interest-bearing gold.

The metal has spent the past fortnight consolidating around the $1,950 an ounce mark as investors await decisive new drivers. That may come from US inflation data due next week, which is forecast to show price pressures continuing to ease.

Spot gold was little changed at $1,961.40 an ounce as of 10:12 a.m. in London. The Bloomberg Dollar Spot Index was steady. Silver and platinum were little changed while palladium edged higher.

Source : Bloomberg