Gold prices stabilized near their all-time high, supported by a weaker U.S. dollar, declining Treasury yields, and softer-than-expected Producer Price Index (PPI) data, which has strengthened market expectations for a Federal Reserve rate cut.
As of recent trading, gold prices hovered close to their peak from July, buoyed by the latest PPI figures that fell short of market expectations. This data reinforced hopes that the Federal Reserve might reduce interest rates in its upcoming September meeting. Spot gold experienced a slight dip, down 0.2% to $2,467.80 per ounce, while U.S. gold futures for December delivery edged up by 0.2%, settling at $2,507.80.
The U.S. dollar’s 0.4% decline against other major currencies made gold more appealing to investors holding non-dollar assets. Simultaneously, the 10-year Treasury yields fell to a one-week low, providing additional support for gold prices. Despite some investors locking in profits, gold has still seen a significant 20% increase this year, largely driven by ongoing geopolitical tensions and persistent market volatility. Analysts, including those from Commerzbank, predict that gold may reach new record highs as inflation data could potentially offer further impetus.
In the broader precious metals market, spot silver dropped 1.2% to $27.68 per ounce, while platinum rose 0.4% to $939.80, and palladium saw a significant increase of 1.8% to $936.29. Market participants are now turning their attention to upcoming U.S. Consumer Price Index (CPI) and retail sales data, which are expected to provide further insights into the Federal Reserve’s policy decisions.