Gold Prices fell on Wednesday as the dollar strengthened, with investors awaiting a crucial US inflation report this week for insight into a potential September rate cut. Spot gold decreased by 0.4% to $2,514.11 per ounce, down from its record high of $2,531.60 reached on August 20. US gold futures dropped 0.2% to $2,549.00.
The dollar index gained 0.1%, reducing gold’s appeal to holders of other currencies. Kelvin Wong, a senior market analyst at OANDA, noted that the market is awaiting a trigger for a potential bullish breakout above $2,532. He indicated that while gold’s short-term outlook remains strong, it might face resistance around $2,585 to $2,595 in the longer term.
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Investors are looking forward to Friday’s US personal consumption expenditure (PCE) data, the Federal Reserve’s preferred inflation measure. Traders are anticipating a 67% chance of a 25-basis-point rate cut and a 33% chance of a 50-basis-point reduction next month, according to the CME FedWatch tool.
Gold, which does not yield interest, typically benefits from a low-interest-rate environment. Fed Chair Jerome Powell recently supported an imminent start to rate cuts and expressed confidence that inflation is nearing the Fed’s 2% target.
A report on Tuesday indicated a rise in US consumer confidence to a six-month high in August, though concerns about the labor market persist.
In July, China’s net gold imports via Hong Kong increased by about 17% from the previous month, marking the first gain since March. Among other metals, spot silver fell 0.7% to $29.78 per ounce, platinum rose 0.3% to $956.00, and palladium decreased 0.4% to $966.40.
