Gold prices The U.S. dollar fell about 1% on Wednesday, pressured by a stronger U.S. dollar as investors watched key inflation data from the world’s largest economy for signs of a possible Federal Reserve interest rate cut in September.
At 9:44 a.m. ET (1344 GMT), spot gold U.S. gold futures also fell 0.6 percent to $2,537.60 an ounce.
“Gold is trading weakly, down 0.35%, with prices at $2,506 on Comex and ₹71,850 on MCX. The rise in the dollar index, from yesterday’s low of 100.40 to 100.85, has prompted profit-taking in commodities, including gold. This strengthening of the dollar is contributing to the current pressure on gold prices. As market participants await Friday’s US Core PCE Price Index, further profit-taking could push gold prices towards $2,480 on Comex and ₹71,000 on MCX,” said Jateen Trivedi, vice president, research analyst, commodities and currencies, LKP Securities.
What’s weighing on gold prices?
The dollar rose 0.5%, making gold more expensive for holders of other currencies.
Investors are now focused on quarterly results from chip giant Nvidia, expected later today, and U.S. personal consumption expenditure (PCE) data due on Friday.
If Friday’s PCE figures come in lower than expected, it could raise expectations of a more dovish stance from the Federal Reserve, which could benefit gold, said Ricardo Evangelista, senior analyst at ActivTrades.
Markets currently see a 66.5% chance of a 25 basis point rate cut by the U.S. Federal Reserve in September and a 34.5% chance of a 50 basis point cut, according to the CME FedWatch tool. Last week, gold ETFs saw modest net inflows of 8 metric tons ($403 million), driven primarily by North American funds, the World Trade Organization (WTO) reported. Gold Council.
In other news, China’s net gold imports via Hong Kong rose 17% in July, the first increase since March, according to data released Tuesday.
As China is a major consumer of goldThis increase in demand could help support global gold prices.
Among other precious metals, spot silver fell 2.3% to $29.29 an ounce, platinum declined 1.5% to $938.95 and palladium declined 1.6% to $954.75.
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