Gold Awaits Inflation Data's Cue: Prices Dip on Rate Cut Speculation

14 Aug 2024 , 11:09 AM

Gold prices fall as US inflation data looms.

Gold prices slipped lower on Wednesday as investors remained cautious ahead of a major US inflation report later in the day, which could set the tone for the Federal Reserve’s September policy meeting.

Spot gold fell 0.2% to $2,460.87 per ounce. Last month, prices rose to a record high of $2,483.60. Gold futures fell 0.3% to $2,500.30.

The U.S. consumer price index data for July is coming at 1230 GMT and is expected to show month-on-month inflation accelerating to 0.2%, with the annual core slowing a tad to 3.2%. Retail sales statistics will be released on Thursday.

Data released on Tuesday indicated that U.S. producer prices rose less than expected in July, bolstering market expectations that decreasing inflation will allow the Federal Reserve to cut interest rates soon.

Traders predict a 54% chance of a 50-basis-point US interest rate drop in September, according to the CME FedWatch Tool.

Raphael Bostic, President of the Atlanta Fed, said he wants to see “a little more data” before he supports interest rate cuts.

Gold, which is commonly employed as a hedge against geopolitical concerns, thrives when interest rates are low.

Spot silver lost 0.6% to $27.68, while platinum dropped 0.5% to $931.73.

Palladium rose 0.1% to $939.25, after reaching its highest level since July 24 in the previous session.

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