July 22 (Reuters) - Gold prices edged up on Monday as the dollar weakened in response to President Joe Biden's decision to withdraw from the 2024 presidential race, while the market geared up for Friday's U.S. personal consumption expenditures (PCE) data for further clues on the timing of interest rate cuts.
Spot gold rose 0.2% to $2,404.95 per ounce, as of 1021 GMT, while U.S. gold futures gained 0.3% to $2,406.50.
The dollar eased following Biden's decision on Sunday to abandon his re-election bid, making bullion more attractive to buyers holding other currencies.
The market is now awaiting U.S. gross domestic product data for the second quarter on Thursday, as well as the personal consumption expenditure (PCE) data on Friday. Investors will also focus on comments by Fed Chair Jerome Powell at the conclusion of the Fed’s July 30-31 meeting, with money markets fully pricing in a 25 bps Fed rate cut by September.
"While we still see two rate cuts by the U.S. Fed, there is a likelihood of a July rate cut if data this week, like the PCE continues to show an economic slowdown," UBS analyst Giovanni Staunovo said.
"We still believe gold has further upside from current levels, (and) target a level of $2,600/oz by the end of the year."
Gold prices scaled an all-time high of $2,483.60 last week on increased chances of U.S. interest rate cuts this year.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
"We have seen a substantial increase in speculative holdings in gold futures/options in recent weeks. There is, however, still room to see an increase in ETF holdings, which requires clarity on a rate cut by the US Fed in our view," Staunovo added.
Spot silver fell 0.6% to $29.09 after falling nearly 5% last week. Platinum slipped 0.8% to $955.23 while palladium rose 0.7% to $912.44.
Reporting by Sherin Elizabeth Varghese in Bengaluru
