Gold prices rise amid weak dollar, anticipation of US interest rate cuts
Date
8/29/2024 8:29:04 AM
(MENAFN) On Thursday, Gold prices experienced a modest increase, buoyed by a weaker U.S. dollar and speculation about a potential interest rate cut by the Federal Reserve. By 0250 GMT, spot gold had risen by 0.5 percent, reaching USD2,513.77 per ounce. This uptick follows an all-time high of USD2,531.60 achieved on August 20 and reflects a notable 22 percent gain in gold’s value for the year. Concurrently, U.S. gold futures also saw an increase, rising 0.4 percent to USD2,546.80 per ounce.
The decline of the dollar by 0.1 percent has made gold more appealing to investors holding other currencies, further supported by a decrease in U.S. Treasury yields. Financial markets analyst Kyle Rodda from Capitalsuggested that while gold appears strong in the long term, there may be a short-term pullback if upcoming economic data diminishes expectations for an interest rate cut. Gold’s allure typically increases in a low interest rate environment due to its non-yielding nature.
Investors are closely monitoring upcoming U.S. economic data, including jobless claims and GDP figures scheduled for release at 1230 GMT. Additionally, personal consumption expenditure data due on Friday could offer further insights into the future trajectory of interest rates. According to the CME FedWatch tool, there is a 65.5 percent probability of a 25 basis point rate cut next month, with a 34.5 percent chance of a more substantial 50 basis point reduction. Atlanta Federal Reserve President Raphael Bostic indicated that, given the current low inflation and high unemployment, it might be time to consider lowering rates, though he approached the idea with caution.
In the broader precious metals market, spot silver rose 0.91 percent to USD29.38 per ounce, platinum increased by 0.5 percent to USD934.52, and palladium gained 0.3 percent, reaching USD948.95 per ounce.
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