Investors stay on the sidelines as they await key US inflation data that could set the tone for the Fed’s September policy meeting
14 August 2024 - 07:59
byDaksh Grover
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Bengaluru — Gold prices edged lower on Wednesday as investors remained on the sidelines ahead of a key US inflation print later in the day that could set the tone for the Federal Reserve’s September policy meeting.
Spot gold eased 0.2% to $2,460.87/oz by 3.27am GMT. Prices hit a record high of $2,483.60 last month. US gold futures edged 0.3% lower to $2,500.30.
US consumer price index (CPI) data for July is due at 12.30pm GMT and expected to show month-on-month inflation accelerated to 0.2%, with the annual core slowing a tick to 3.2%. Retail sales data is scheduled for Thursday.
Gold could drop to $2,300 if the data did not align with expected rate cuts, but in the long term, gold was likely to rise as the US economy weakened enough for the Fed to cut rates significantly, said Kyle Rodda, a financial market analyst at Capital.com.
Data on Tuesday showed that US producer prices increased less than expected in July, reinforcing market view that cooling inflation will allow the Federal Reserve to cut interest rates soon.
Traders expect a 54% chance of a 50 basis point (bp) US rate cut in September, according to the CME FedWatch Tool.
Atlanta Fed president Raphael Bostic said he wanted to see “a little more data” before he was ready to support lowering interest rates.
Gold, often used as a hedge against geopolitical risks, thrives when interest rates are low.
Investors were largely buying gold in anticipation of a retaliatory strike from Iran, but they would unwind those positions if the strike did not occur, said Rodda.
Only a ceasefire deal in Gaza stemming from hoped-for talks this week would hold Iran back from direct retaliation against Israel for the assassination of Hamas leader Ismail Haniyeh on its soil, three senior Iranian officials said.
Spot silver fell 0.6% to $27.68, platinum shed 0.5% to $931.73.
Palladium edged 0.1% higher to $939.25 after hitting its highest level since July 24 in the previous session.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold slips ahead of US inflation data
Investors stay on the sidelines as they await key US inflation data that could set the tone for the Fed’s September policy meeting
Bengaluru — Gold prices edged lower on Wednesday as investors remained on the sidelines ahead of a key US inflation print later in the day that could set the tone for the Federal Reserve’s September policy meeting.
Spot gold eased 0.2% to $2,460.87/oz by 3.27am GMT. Prices hit a record high of $2,483.60 last month. US gold futures edged 0.3% lower to $2,500.30.
US consumer price index (CPI) data for July is due at 12.30pm GMT and expected to show month-on-month inflation accelerated to 0.2%, with the annual core slowing a tick to 3.2%. Retail sales data is scheduled for Thursday.
Gold could drop to $2,300 if the data did not align with expected rate cuts, but in the long term, gold was likely to rise as the US economy weakened enough for the Fed to cut rates significantly, said Kyle Rodda, a financial market analyst at Capital.com.
Data on Tuesday showed that US producer prices increased less than expected in July, reinforcing market view that cooling inflation will allow the Federal Reserve to cut interest rates soon.
Traders expect a 54% chance of a 50 basis point (bp) US rate cut in September, according to the CME FedWatch Tool.
Atlanta Fed president Raphael Bostic said he wanted to see “a little more data” before he was ready to support lowering interest rates.
Gold, often used as a hedge against geopolitical risks, thrives when interest rates are low.
Investors were largely buying gold in anticipation of a retaliatory strike from Iran, but they would unwind those positions if the strike did not occur, said Rodda.
Only a ceasefire deal in Gaza stemming from hoped-for talks this week would hold Iran back from direct retaliation against Israel for the assassination of Hamas leader Ismail Haniyeh on its soil, three senior Iranian officials said.
Spot silver fell 0.6% to $27.68, platinum shed 0.5% to $931.73.
Palladium edged 0.1% higher to $939.25 after hitting its highest level since July 24 in the previous session.
Reuters
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