Gold inches higher as traders eye US retail sales data

Bengaluru — Gold prices inched up on Thursday after a 1% decline in the previous session following inflation data that dampened the hope for a larger September US rate cut, while the focus shifted to retail sales data.

Spot gold rose 0.2% to $2,452.83/oz by 3.17am GMT, after prices fell their most since Aug. 6 on Wednesday. US gold futures were 0.4% up at $2,490.20.

The prospects of less aggressive rate easing could have triggered some profit-taking in gold prices overnight, said IG market strategist Yeap Jun Rong.

“Prices are regaining some ground in the Asia session on some views that there may be some over-reaction in yesterday’s downside move,” Yeap said.

Data on Wednesday showed that the US consumer price index (CPI) rose moderately in July and the annual increase in inflation slowed to below 3% for the first time since early 2021.

The data opened the door wider for the US Federal Reserve to cut rates in September but a larger reduction is unlikely.

Traders now see about a 36% chance of a 50 basis point (bp) rate cut in September, down from 50% before the data release, according to the CME FedWatch Tool.

A low interest rate environment tends to boost non-yielding bullion’s appeal.

The market focus will be now on US retail sales and initial jobless claims data, both due at 12.30pm GMT.

A break to a new record high could be on the table for gold, amid the Fed’s rate-easing cycle, healthy central bank demand and geopolitical and economic risks, Yeap said.

Hamas said on Wednesday it would not take part in a new round of Gaza ceasefire talks slated for Thursday in Qatar.

Spot silver gained 0.2% to $27.65, platinum rose 0.9% to $927.51 and palladium edged 0.1% higher to $936.26

SA’s Northam Platinum on Wednesday warned of a sharp fall in profit, saying it expected an uncertain global economic outlook to keep platinum group metal (PGM) prices low for “some time”.

Reuters