Gold Holds Steady, Awaiting US Inflation Data

10 Sep 2024 , 09:51 AM

Gold prices remained unchanged on Tuesday as market investors watched August inflation data for clues about a possible Federal Reserve interest rate cut this month.

Spot gold was unchanged at $2,504.98 per ounce. U.S. gold futures ticked up 0.1% to $2,533.70.

On Wednesday, traders will focus on the U.S. Consumer Price Index (CPI) data, which is likely to show that underlying inflation continues to meander back down towards the central bank’s 2% target, as well as the Producer Price Index (PPI) reading on Thursday.

According to a report released on Monday by the New York Federal Reserve, the US public’s expectations for inflation remained constant last month, even as existing pricing pressures lessened.

Fed funds futures traders are now pricing in a 70% likelihood of a 25-basis-point drop at the Fed’s September 17-18 meeting, as well as a 30% chance of a 50-basis-point reduction, according to the CME FedWatch Tool.

A report released last week showed that U.S. employment increased less than predicted in August, but a drop in the unemployment rate to 4.2% indicated that the labour market was not falling off a cliff to necessitate a half-point cut.

Data released on Monday revealed that U.S. wholesale inventories rose less than expected in July, despite a robust rise in sales, casting doubt on whether inventory investment will add to economic growth in the third quarter.

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