Gold prices fall as dollar strength, expected US inflation data weigh on market
Date
9/11/2024 6:14:52 AM
(MENAFN) Gold prices experienced a slight decline in early trading on Tuesday, driven by a stronger dollar as traders awaited crucial U.S. inflation data that could influence the size of the anticipated interest rate cut by the Federal Reserve next week. Spot gold was down 0.1 percent at USD2,503.09 per ounce by 0301 GMT, while U.S. gold futures remained stable at USD2,532.20. The dollar's ascent to a one-week high made gold more expensive for holders of other currencies, contributing to the downward pressure on prices.
The market is closely monitoring the upcoming U.S. Consumer Price Index (CPI) data, scheduled for release on Wednesday, along with the Producer Price Index (PPI) data due on Thursday. The CPI is expected to show a 0.2 percent increase on a monthly basis for August, matching the growth rate recorded in July, according to a poll. Ye Jun Rong, chief market analyst at IG, noted that a further slowdown in inflation could prompt the Federal Reserve to proceed with an interest rate cut. If the data does not present any major surprises, gold prices are anticipated to remain well-supported above USD2,500, with expectations of reaching USD2,660 in the coming months due to the lower opportunity cost associated with holding the non-yielding metal.
In terms of other precious metals, spot silver declined by 0.3 percent to USD28.27 per ounce, while platinum and palladium saw slight increases of 0.5 percent to USD942.45 and 0.4 percent to USD950.55, respectively. The Federal Reserve is widely expected to reduce interest rates during its meeting next week, with traders assigning a 70 percent probability to a 25 basis point cut and a 30 percent chance to a 50 basis point reduction, as indicated by the CME FedWatch tool.
MENAFN11092024000045015682ID1108661363
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.