Gold prices fall amid stronger dollar, anticipation of inflation data

(MENAFN) On Wednesday, gold prices experienced a decline, primarily influenced by the strengthening of the US dollar. Spot gold prices fell by 0.8 percent, reaching USD2,504.25 per ounce by 11:13 GMT. This drop follows a slight increase on Tuesday, where prices had risen by 0.3 percent to a record closing level of USD2,524.57. The appreciation of the dollar made gold less appealing to investors holding other currencies, contributing to the decline. Despite the dollar's recent retreat to its lowest levels in over a year, it managed to recover slightly on Wednesday, with the dollar index increasing by 0.34 percent against a basket of major currencies.

Market dynamics are currently influenced by several factors, including Nvidia’s financial results and anticipation of upcoming US inflation data. Traders are closely monitoring these developments for insights into potential changes in US interest rates. The Federal Reserve's cautious approach to monetary policy is adding to market uncertainty, leading some investors to prefer holding cash. The forthcoming US personal consumption expenditure (PCE) data, scheduled for release on Friday, will be particularly important as it serves as the Federal Reserve’s favored inflation measure.

In addition to gold, other precious metals also saw declines. Silver prices dropped by 1.8 percent to USD29.42 per ounce, platinum fell by 1.4 percent to USD940.20, and palladium decreased by 1.3 percent to USD958. The overall trend reflects a broader market reaction to the dollar's performance and investor anticipation of future economic indicators. 

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