Gold prices dip as profit-taking sets in, yet remain poised for a fourth consecutive weekly gain amid expectations of a Fed rate cut in September.
Bollywood Fever: Gold prices slipped on Friday, but the precious metal is still on track for a fourth consecutive weekly gain as expectations that the Federal Reserve will cut interest rates in September continue to boost bullion’s appeal.
Spot gold fell 0.8% to $2,424.34 per ounce by 0231 GMT, having risen 0.7% so far this week. The metal hit an all-time high of $2,483.60 on Wednesday. U.S. gold futures also declined, falling 1.2% to $2,426.10.
The U.S. dollar edged up 0.1% on Friday, and benchmark 10-year Treasury yields also saw a slight increase, exerting pressure on gold prices.
Kelvin Wong, OANDA’s senior market analyst for Asia Pacific, noted that while gold is experiencing some profit-taking, the medium-term outlook remains positive amid political uncertainty and anticipated rate cuts.
Market expectations for a Fed rate cut in September are high, with the CME FedWatch Tool indicating a 98% chance of such an event. In a low-interest-rate environment, non-yielding bullion tends to be more attractive.
Earlier this week, Fed Chair Jerome Powell remarked that recent inflation readings “add somewhat to confidence” that the pace of price increases is returning to the central bank’s target sustainably, hinting that rate cuts may be imminent. Additionally, Federal Reserve Bank of San Francisco President Mary Daly commented on Thursday that “we don’t have price stability right now.”
Julia Khandoshko, CEO at European broker Mind Money, suggested that an official announcement of the Fed easing its monetary policy could further boost gold prices, potentially driving them to a record $3,000 by autumn 2024.
Elsewhere, Swiss gold exports in June fell to their lowest level since April 2022 due to reduced shipments to China and India, according to customs data.
Among other metals, spot silver fell 1.8% to $29.54 per ounce, platinum eased 0.5% to $962.65, and palladium dropped 0.4% to $926.50. All three metals were headed for weekly declines.
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