USA Gold prices dropped on Wednesday as the U.S. dollar strengthened. A key U.S. inflation report, scheduled later this week, will hopefully provide more clarity for investors on a rate cut in September.
U.S. gold futures dropped by 0.4% to $2,543.20.
The dollar index climbed nearly 0.2%, making gold less appealing to other currency buyers.
“Gold remains structurally bullish as many believe the Federal Reserve will begin lowering interest rates next month,” said Tastylive global macro head Ilya Spivak. CME FedWatch shows a 66% probability of a 25 basis points cut in September and a 34% chance of a 50 basis points cut. Gold does better when interest rates are low since it doesn’t pay interest rates.
Federal Reserve Chair Jerome Powell a week ago supported the notion of an imminent interest-rate down and stated that he was confident about the Federal Reserve approaching its 2% inflation target. OANDA senior market analyst Kelvin Wong added, “The market is waiting for an opportunity to push gold up over the $2,532 mark.” The U.S. personal consumption expenditure, the Federal Reserve’s top inflation measurement, is due on Friday.
Concerns over anxiety about consumer confidence and the labor market were highlighted yesterday when a report showed that U.S. consumer confidence had climbed to its highest level in six months in August but that many people were worried about the labor market.
According to data published on Tuesday, China’s gold imports through Hong Kong increased by about 17% in July, the initial increase since March.
Other precious metals: spot silver fell 1.7% to $29.48 per ounce, platinum decreased by 1% to $943.70, and palladium decreased by about 1% to $960.25.
Gold prices currently:
Spot gold fell by nearly 0.6% to $2,509.75 per ounce at 0749 GMT after reaching a record $2,531.60 high on August 20.