SINGAPORE: Gold prices held their ground on Thursday, with a softer dollar giving the precious metal a slight lift as markets looked ahead to crucial US economic data that could shape the Federal Reserve’s next policy steps.
Spot gold was trading at $3,737.01 per ounce by 0347 GMT, while US gold futures for December delivery were flat at $3,767.90. The dollar index slipped 0.1 percent, making bullion more affordable for holders of other currencies.
Fed signals and market expectations
Confidence in gold has been buoyed by expectations of further interest rate cuts from the Federal Reserve. On Wednesday, San Francisco Fed President Mary Daly said she fully backed last week’s rate cut and anticipated more easing in the months ahead.
Analysts see this as a sign that the central bank may be willing to allow the US economy to run hotter, with greater attention placed on supporting jobs. “Initial support levels line up around $3,700 and $3,600. Breaking resistance at the latest high near $3,790 might expose $3,870-$3,875, followed by $4,000,” said Ilya Spivak, head of global macro at Tastylive.
Eyes on PCE inflation data
Investors are now awaiting Friday’s release of the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge. A Reuters poll suggests the index will show a 0.3 percent monthly increase in August and a 2.7 percent annual rise.
“I don’t think the inflation data will significantly impact gold unless it’s exceptionally high,” said Brian Lan, managing director at GoldSilver Central. “The longer-term outlook remains bullish.”
Weekly US jobless claims data, due later on Thursday, may also provide clues on the labour market’s health. Markets broadly expect the Fed to deliver two more 25-basis-point cuts this year, one in October and another in December.
Gold, often favoured as a safe-haven asset in times of lower interest rates, touched a record $3,790.82 earlier this week. Among other precious metals, spot silver inched up 0.1 percent to $43.97 per ounce, platinum gained 0.4 percent to $1,477.94, and palladium rose 0.2 percent to $1,211.84.
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