Global gold prices rose during these moments of trading on Wednesday, as investors eagerly await US inflation data for hints on the size of the potential interest rate cut by the Federal Reserve next week.
“Gold is rangebound in a well-supported market ahead of the key US inflation report,” said Matt Simpson, senior analyst at City Index, adding that the data is likely to show weak inflation and send gold to a record high.
US CPI data is due at 15:30 Riyadh time, while PPI and initial jobless claims are due on Thursday.
The CPI report is expected to show inflation is approaching the Fed's 2% target, supporting Fed Chairman Jerome Powell's view that price growth is under control and playing a pivotal role in determining the size of next week's interest rate cut.
Most economists polled by Reuters said the Fed will cut interest rates by 25 basis points at each of the three remaining policy meetings in 2024.
Zero-yield bullion tends to be a preferred investment amid low interest rates and geopolitical turmoil.
“I see good support for gold prices around $2,450-2,460. By the end of the year, gold is expected to trade around $2,600, driven by the US rate cut and ongoing geopolitical tensions,” said Peter Fung, head of trading at Wing Fung Precious Metals.
The US interest rate tracking tool available on Investing Saudi Arabia showed that investors unanimously expected interest rates to be cut at the Federal Reserve’s monetary policy meeting next week, with 67% expecting a 25 basis point cut, while 33% said they expected borrowing costs to be cut by about 50 basis points.
In this context, Daniel Ghali, commodity strategist at TD Securities, confirmed that gold prices are trading in a very narrow range, awaiting the next catalyst, which is likely to be the US presidential debate tonight, followed shortly after by inflation data.
Gold at settlement yesterday
Gold prices turned higher during trading on Tuesday, as benchmark US Treasury yields fell to their lowest level since June 2023, amid growing market expectations that the Federal Reserve will cut interest rates this month.
At the settlement of transactions, gold futures for December delivery rose by 0.4%, or $10.4, to $2,543.1 per ounce, as the yellow metal continued its gains for the second consecutive session.
Gold and dollar now
Gold futures are now up 0.42% at $2,553 an ounce.
While spot gold contracts rose by about 0.32% to $2,524 per ounce.
On the other hand, the dollar index fell by 0.26% to 101.33 points.
Other minerals
Spot silver rose 0.1 percent to $28.40 an ounce, platinum rose 0.6 percent to $943.10 and palladium rose 0.9 percent to $973.78.
