Gold prices remained steady near record highs on Thursday, buoyed by softer-than-expected U.S. producer prices data which reinforced expectations of a Federal Reserve interest rate cut next week. Spot gold held firm at $3,636.59 per ounce, following a previous record high of $3,673.95 on Tuesday, while U.S. gold futures for December delivery edged down 0.1% to $3,676.40.
Analysts attribute gold's recent climb to weak U.S. macroeconomic data, including unexpected drops in U.S. producer prices due to various factors like lower trade service margins and modest goods costs. Investors are now eagerly anticipating U.S. Consumer Price Index (CPI) data for further insights.
The upcoming CPI data, expected to show a 0.3% monthly increase in August, has the potential to impact gold prices further. Edward Meir, an analyst at Marex, mentioned that unless the CPI data disappoints, gold prices are likely to continue their upward trajectory. Weaker-than-expected nonfarm payroll data and revised job estimates have also contributed to expectations of monetary easing by the Federal Reserve.
Market sentiment indicates that the Fed is likely to lower interest rates by 25 basis points at its upcoming meeting, with a slim possibility of a 50-basis-point cut. Gold, known for performing well in low-interest-rate environments, stands to benefit from potential rate cuts.
In the midst of these developments, investors are also keeping an eye on the U.S. labor market, with weekly jobless claims data due at 1230 GMT. Meanwhile, U.S. President Donald Trump's administration has appealed a federal judge's ruling that temporarily blocked the dismissal of Fed Governor Lisa Cook.
In other precious metal news, spot silver saw a slight decline to $41.09 per ounce, while platinum held steady at $1,386.75 and palladium dropped 0.1% to $1,172.
Overall, the gold market is set for further developments as investors await key economic data and the Federal Reserve's decision on interest rates. Stay tuned for more updates on how these factors could impact precious metal prices in the coming days.
