GOLD prices inched lower on Thursday, as market participants took profits after a recent rally and held back from placing massive bets ahead of U.S. economic data that could clarify the Federal Reserve’s interest rate outlook.
Spot gold was down 0.2% at $3,389.73 per ounce, as of 0538 GMT. Earlier in the session, bullion touched its highest point since August 11.
U.S. gold futures for December delivery eased 0.1% to $3,445.20.
“We’ve got a lot of positive interest for gold because of that sort of issues with institutional trusts and risks about Fed’s independence,“ said Kyle Rodda, Capital.com’s financial market analyst.
Investors are now awaiting the release of the Personal Consumption Expenditures (PCE) Price Index, the preferred inflation measure of the U.S. Fed, scheduled for Friday.
“But we’re really looking for something more sort of to push the price above critical level of $3,400 … the U.S. PCE data will be super significant. We are still bullish on gold. I think all the fundamentals moving in the right direction,“ he added.
Economists polled by Reuters expect the PCE price index to rise 2.6% in July, matching the climb from the prior month.
Markets are anticipating an over 88% chance of a 25-basis-point rate cut at the Fed’s policy meeting next month, according to CME FedWatch Tool.
Non-yielding gold typically performs well in a low-interest-rate environment.
New York Fed Bank President John Williams said on Wednesday it is likely interest rates can fall at some point but policymakers will need to see what upcoming data indicate about the economy to decide if it’s appropriate to make a cut next month.
Elsewhere, spot silver was up 0.3% at $38.71 per ounce, platinum was down 0.2% at $1,344.60 and palladium edged 0.1% higher to $1,093.01 – REUTERS