Despite a little decline on Friday, gold prices were expected to rise monthly ahead of US inflation statistics that will give additional clues about the Federal Reserve’s pace of rate cuts. As of 0818 GMT, the price of spot gold was down 0.1% at $3,414.07 per ounce. Bullion reached its highest level since July 23 on Thursday at $3,423.16 after rising 3.6% in August.
Aside from the dollar’s modest gain, gold is also experiencing the gravitational pull that huge, round figures usually have. The chief market analyst of Nemo. Money, Han Tan, stated that the markets seem hesitant to allow gold to deviate much from the psychological $3,400 level before the PCE data. Although the dollar increased, it was expected to decline 2.2% per month. On Thursday, benchmark 10-year rates were just above a two-week low, but they were still on track to drop for the month.
It should be possible for silver bulls to maintain their position above $3,400, provided that the inflation increase is not more severe than anticipated. However, spot gold may drop back into the sub-$3,400 range once more if the PCE readings fail to meet market expectations for Fed rate cuts this year, Tan stated.
Gold that doesn’t yield usually does well when interest rates are low. Waller, the governor of the Federal Reserve, intensified his demand on Thursday to lower short-term borrowing costs in the United States by stating that he would back a rate drop next month.
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