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Gold prices decline slightly as US inflation data awaits
(MENAFN) Gold prices experienced a slight decline on Tuesday, slipping by 0.2 percent to USD2,466.69 per ounce as of 0155 GMT. Despite this drop, the precious metal remained near its highest level in a week, having reached its peak since August 2 earlier in the trading session. The market's focus is now on upcoming U.S. inflation data, which is anticipated to offer critical insights into the Federal Reserve's future interest rate decisions, according to a report by a UK news agency.
The U.S. gold futures market, on the other hand, saw a modest rise of 0.1 percent, bringing futures prices to USD2,506.90 per ounce. This slight uptick in futures occurred even as spot gold dipped, reflecting the complex dynamics traders are navigating ahead of the release of key economic indicators. The U.S. producer price index (PPI) data for July is scheduled for release later today, with the consumer price index (CPI) data set to follow on Wednesday. These figures are expected to be pivotal in shaping market expectations regarding inflation and the Fed's policy direction.
Market analysts forecast that both inflation and core inflation figures will show a 0.2 percent increase on a monthly basis. Such a rise would reinforce expectations that the Federal Reserve may adjust its monetary policy in response to persistent inflationary pressures. The CME FedWatch tool currently indicates that traders are evenly split, with a 50 percent probability that the Fed might opt to cut interest rates by 50 basis points in its September meeting. In this context, the appeal of gold, which typically benefits from a low-interest-rate environment due to its non-yielding nature, is closely tied to these forthcoming data releases.
Meanwhile, the performance of other metals on the market varied. Silver saw a decline of 0.5 percent in spot transactions, bringing its price down to USD27.8607 per ounce. Platinum, however, managed a slight gain of 0.2 percent, trading at USD938.55 per ounce. Palladium faced a minor setback, losing 0.4 percent to trade at USD917.10 per ounce. These movements underscore the broader uncertainty in the metals market, as investors weigh the potential impacts of U.S. economic data on precious metals and the broader commodities market.
The U.S. gold futures market, on the other hand, saw a modest rise of 0.1 percent, bringing futures prices to USD2,506.90 per ounce. This slight uptick in futures occurred even as spot gold dipped, reflecting the complex dynamics traders are navigating ahead of the release of key economic indicators. The U.S. producer price index (PPI) data for July is scheduled for release later today, with the consumer price index (CPI) data set to follow on Wednesday. These figures are expected to be pivotal in shaping market expectations regarding inflation and the Fed's policy direction.
Market analysts forecast that both inflation and core inflation figures will show a 0.2 percent increase on a monthly basis. Such a rise would reinforce expectations that the Federal Reserve may adjust its monetary policy in response to persistent inflationary pressures. The CME FedWatch tool currently indicates that traders are evenly split, with a 50 percent probability that the Fed might opt to cut interest rates by 50 basis points in its September meeting. In this context, the appeal of gold, which typically benefits from a low-interest-rate environment due to its non-yielding nature, is closely tied to these forthcoming data releases.
Meanwhile, the performance of other metals on the market varied. Silver saw a decline of 0.5 percent in spot transactions, bringing its price down to USD27.8607 per ounce. Platinum, however, managed a slight gain of 0.2 percent, trading at USD938.55 per ounce. Palladium faced a minor setback, losing 0.4 percent to trade at USD917.10 per ounce. These movements underscore the broader uncertainty in the metals market, as investors weigh the potential impacts of U.S. economic data on precious metals and the broader commodities market.
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