Oil prices fall, gold steady in Asian trade

Oil prices dipped in early Asian trade as investors tread cautiously ahead of fresh economic data from top consumers the United States and China this week, while expected crude supply cuts from Saudi Arabia and Russia supported the market.

Brent crude futures fell 22 cents, or 0.3%, to $78.25 a barrel by 0107 GMT, and US West Texas Intermediate crude was at $73.57 a barrel, down 29 cents, or 0.4%.

"Oil traders may be cautious ahead of the U.S. CPI and China's slew of economic data later this week," CMC Markets analyst Tina Teng said on Monday.

However, crude prices could rebound after OPEC+ announced plans to further reduce supply, she said.

Both benchmarks gained more than 4% last week to touch their highest marks since May, rising for a second straight week after the world's biggest oil exporters Saudi Arabia and Russia pledged to deepen supply cuts in August.

Saudi Arabia will extend its 1 million barrels per day (bpd) output cut into August and Russia will cut crude exports by 500,000 bpd. Instead of cutting output, Russia will be using the crude to produce more fuel to meet domestic demand, a government source told Reuters on Friday.

Non-OPEC+ supply has been keeping up with global demand, JP Morgan analysts said in a note, adding that OPEC+ needs to deepen its cuts by another 700,000 bpd in the second half of the year on top of announced reductions and extend them into 2024.

Gold remains stable

Gold prices were little changed on Monday after US jobs data last week cast doubts over the labour market's strength, prompting investors to be more sceptical of the Federal Reserve's rate hike trajectory.

Spot gold was steady at $1,923.62 per ounce by 0347 GMT. US gold futures were down 0.2% at $1,929.50 per ounce.

The Labor Department's closely watched employment report on Friday showed the US economy added the smallest jobs in 2-1/2 years in June, but persistently strong wage growth pointed to still-tight labour market conditions.

"The non-farms were less eventful than the prior ADP (employment data), but importantly, don't seem to challenge expectations around a July hike by the Fed," said Nicholas Frappell, global head of institutional markets at ABC Refinery.

"It would take a profound miss on the upcoming CPI data (July 12) to alter this view, I believe."

Gold is highly sensitive to higher rates as they dampen the appeal of bullion, which pays no interest. Prices have dropped over 7% since reaching near-record levels in early May as investors scaled back expectations of an end to the US Federal Reserve's rate-hiking cycle.

However, an Invesco survey of central bank and sovereign wealth funds published on Monday showed that an increasing number of countries are repatriating gold reserves as protection against the sort of sanctions imposed by the West on Russia.