Gold stabilizes as traders await US inflation data for evidence of federal reserve policy
Date
8/14/2024 8:19:26 AM
(MENAFN) Gold prices remained stable in early trading on Wednesday, as U.S. producer price data sparked optimism for an imminent interest rate cut. Spot gold was priced at USD2,465.27 per ounce by 0158 GMT, while U.S. gold futures edged down 0.1 percent to USD2,504.50. The modest rise in U.S. producer prices for July, which was below expectations, reinforced market anticipation that easing inflation may soon prompt the Federal Reserve to lower interest rates. This sentiment is further bolstered by expectations that the July U.S. consumer price index data, set for release later in the day, will show a modest increase of 0.2 percent.
Looking ahead, traders are eyeing the Federal Reserve's potential policy shifts, with approximately 54 percent of market participants predicting a 50 basis point rate cut in September, followed by another reduction in December, as per the CME FedWatch tool. In a low interest rate environment, the appeal of gold, a non-yielding asset, generally increases.
In addition to gold, other precious metals showed mixed movements. Silver prices fell slightly by 0.15 percent to USD27.80 per ounce, while platinum saw a 0.2 percent increase to USD938.25. Palladium experienced a modest rise of 0.18 percent, reaching USD940.25, and hit its highest level since July 24 in the previous trading session.
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