Gold prices fall, still on track for second monthly gain amid expectations of federal rate cut
(MENAFN) Gold prices experienced a slight decline on Friday, although they remained on track for a second consecutive monthly gain. This comes amid increasing expectations that the U.S. Federal Reserve will implement an interest rate cut next month. Spot gold fell by 0.3 percent to USD2,513.70 per ounce by 0543 GMT, although it is still poised to achieve a 3 percent gain for the month. U.S. gold futures also saw a decline, falling 0.5 percent to USD2,547.10 per ounce. Traders are closely watching economic indicators, such as the upcoming U.S. inflation data, which could influence the likelihood of a rate cut. According to the CME Group's FedWatch tool, there is currently a 66 percent probability of a 25 basis point cut and a 34 percent chance of a more substantial 50 basis point cut.
These potential rate cuts may be affected by the U.S. personal consumption expenditures data scheduled for release at 1230 GMT. Additional data released on Thursday revealed a slight decrease in weekly unemployment benefit applications in the United States, yet job opportunities for those who have lost their jobs have become increasingly scarce. On the geopolitical front, tensions in the Middle East persist. However, a senior official from the World Health Organization announced that the Israeli military and Hamas have agreed to three separate temporary three-day truces in specific areas of Gaza to facilitate polio vaccination campaigns. Despite these truces, fears of a broader conflict in the region continue to loom.
In the broader market for precious metals, spot silver remained steady at USD29.44 per ounce, while palladium edged up by 0.1 percent to USD981 per ounce, with both metals on track for monthly gains. Meanwhile, platinum rose 0.8 percent to USD945.10 per ounce, but it is nearing its third straight month of losses. As the market continues to react to economic data and geopolitical developments, traders remain cautious about the direction of precious metal prices.
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