On Wednesday (Jul 10), gold prices remained stable as investors awaited crucial US inflation figures that could influence the Federal Reserve’s stance on interest rates.
Spot gold traded nearly unchanged at US$2,365.09 per ounce as of 0040 GMT, while US gold futures edged up 0.2 percent to US$2,372.60.
Federal Reserve Chair Jerome Powell, speaking to Congress, noted that inflation had shown improvement in recent months. He emphasized that further positive economic data would bolster the case for a more accommodative monetary policy. However, Powell refrained from indicating any specific timeline for future rate actions.
According to the CME Group’s FedWatch Tool, traders are currently pricing in a 73 percent probability of a rate cut in September. Gold, which yields no interest, typically becomes more attractive to investors in lower interest rate environments.
Investor attention now turns to Thursday’s release of the consumer price index (CPI) data. Expectations are for a 0.1 percent increase in headline prices for the month, while core prices, excluding volatile food and energy sectors, are anticipated to rise by 0.2 percent. This would translate into year-on-year gains of 3.1 percent and 3.4 percent, respectively.
Recent data indicating a rise in US small-business confidence to a six-month high in June suggests underlying economic resilience. However, concerns about inflation persist among market participants.
Related topics:
