Gold Surges on Fed Rate Cut Hopes

29 Aug 2024 , 09:36 AM

Gold prices rose on Thursday, aided by expectations of a September interest rate decrease in the United States and a weaker dollar, as traders waited for jobs data and a key inflation print from the world’s largest economy to telegraph the Federal Reserve’s policy course.

Spot gold was up 0.46% to $2,513.73 per ounce. On August 20, bullion reached a record high of $2,531.60.

US gold futures increased 0.4% to $2,546.70.

Federal Reserve Bank of Atlanta President Raphael Bostic said on Wednesday that with inflation falling further and the unemployment rate rising faster than expected, it may be “time to move” on rate cuts, but he wants to be certain before pulling the trigger.

Traders have fully priced in a Fed easing for next month, with a 65.5% chance of a 25-basis-point decrease and a 34.5% chance of a larger 50-bp reduction, according to the CME FedWatch tool.

Adding to support, the dollar fell 0.1%, making gold more tempting to holders of other currencies.

Market players are now waiting for initial unemployment claims data from the United States, which is due at 1230 GMT, as well as Personal Consumption Expenditures (PCE), the Fed’s preferred inflation barometer, on Friday.

Meanwhile, Nvidia, the leading AI chipmaker, failed to match investors’ lofty expectations with its quarterly projection on Wednesday.

Spot silver rose 0.5% to $29.245 per ounce, platinum nudged up 0.22% to $932.06, while palladium climbed 0.2% to $948.31.

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