Gold prices stabilize as market awaits inflation data, possible interest rate cuts

(MENAFN) On Monday, gold prices remained stable, trading just below the USD2,500 per ounce mark, as market participants awaited August inflation data for clues on a potential interest rate cut later this month. Spot gold prices were largely unchanged at USD2,497.53 per ounce as of early morning GMT, while U.S. gold futures saw a slight increase of 0.1 percent, reaching USD2,526.40 per ounce.

Recent data released on Friday revealed that U.S. nonfarm payrolls increased by 142,000 jobs in August, falling short of economists’ expectations of a 160,000 gain as per a poll. Additionally, July's employment figures were revised downward to 89,000 jobs. Federal Reserve officials have indicated their intention to implement a series of interest rate cuts, with their next meeting scheduled in two weeks. The unemployment rate for August was 4.2 percent, matching forecasts but down from the 4.3 percent reported the previous month. Analysts suggest that the Fed might consider a quarter-point rate cut, with the possibility of a more substantial cut if labor market conditions deteriorate further. According to CME Group's FedWatch tool, traders currently see a 71 percent likelihood of a 25 basis point rate cut at the Fed's September 17-18 meeting, and a 29 percent chance of a 50 basis point cut.

In the broader precious metals market, prices also saw gains, with spot silver rising 0.3 percent to USD28.01 per ounce, platinum increasing by 0.3 percent to USD924.02, and palladium advancing nearly 1 percent to USD919.76. Lower interest rates diminish the opportunity cost of holding non-yielding gold, contributing to its steady performance amidst shifting economic expectations.

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