Now Reading: Gold eases from two-month peak, traders await US inflation data
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Gold eases from two-month peak, traders await US inflation data
Gold eases from two-month peak, traders await US inflation data
Gold edged lower on Thursday after hitting its highest since June 5, as traders paused to assess the next move in interest rates. Spot gold fell 0.5 per cent to $4,383.53 per…
The Story in Brief
Gold edged lower on Thursday after hitting its highest since June 5, as traders paused to assess the next move in interest rates. Spot gold fell 0.5 per cent to $4,383.53 per ounce by 0601 GMT, after jumping about 1 per cent earlier, The Hindu Business Line reports. US futures for December delivery slipped 0.6 per cent to $4,440.80.
The pullback followed a rally fuelled by data showing US inflation cooled to 3.4 per cent in July, its slowest annual pace in two months. The CME FedWatch Tool now shows a 40 per cent chance of a rate hike at the Fed's September meeting, down from 54 per cent a week ago. Traders are now focused on the producer price index report for further clues. Lower rates reduce the opportunity cost of holding gold, which offers no yield.
The Indian Opinion
The usual narratives are at play: gold bugs call every rally a breakout, while bears insist every dip proves the metal is dead. The truth is simpler. Gold has gained over 8 per cent this month because traders have dialled back rate hike bets after softer data. The key test is the August employment report and the Fed's Jackson Hole symposium later this month. If jobs remain strong, the rate-cut narrative fades and gold will struggle to hold $4,400. Watch the payrolls number.
Sources (2): thehindubusinessline.com, livemint.com
This story was synthesised by AI from the 2 sources linked above.
