Gold prices witnessed a noticeable rise during these moments of trading, today, Wednesday, supported by the decline of the US dollar, while investors' eyes are directed to the basic inflation data in the United States. This data will determine the path of the expected interest rate cut by the Federal Reserve next month.
On the other hand, the dollar index fell, making gold more attractive to investors holding other currencies. The dollar had fallen to its lowest levels in a week during yesterday’s session, which slightly boosted the precious metal’s prices.
According to Kyle Rodda, a financial analyst at Capital.com, the volatility in gold prices reflects the movements of the dollar, although price movements in the Asian session were limited.
Rodda explained that the trade war led by former President Donald Trump may have long-term positive effects on gold, noting that the increase in global debt and attempts to reduce dependence on the dollar may support the yellow metal.
On the economic data front, recent consumer confidence figures showed that the US economy remains strong, prompting investors to focus on the release of core personal consumption expenditures, initial jobless claims, and revised GDP later today. Current market expectations, according to the US interest rate tracker available on Investing Saudi Arabia, indicate a 63% chance of a 25bp rate cut in December.
In this context, Dan Struven, an expert at Goldman Sachs (NYSE:GS), pointed out that Trump's policies such as pressuring the Federal Reserve, increasing the fiscal deficit, and escalating tariffs could all be supportive factors for gold prices.
