BENGALURU: Gold prices rose on Wednesday as the dollar slipped with investors’ focus shifting to US economic data due this week for fresh signals on the timing of the central bank’s interest rate cuts.
Spot gold was up 0.7% at $2,425.28 per ounce, as of 1349 GMT. US gold futures gained 0.8% to $2,426.60. “A weaker US dollar index, lower US stock index prices, and higher crude oil prices,” are supporting buying interest for both gold and silver, said Jim Wyckoff, senior market analyst at Kitco Metals.
The dollar index was down 0.2%. A weaker dollar makes bullion more attractive to buyers holding other currencies. The tech-heavy Nasdaq took the biggest hit in a weak open for Wall Street on Wednesday. Investors are looking forward to a US report on gross domestic product for the second quarter on Thursday and personal consumption expenditures data for June on Friday for clues on the Federal Reserve’s interest rate cut path.
“The main thing helping gold right now is market expectations that the Fed may actually decide to cut earlier than September,” said Chris Gaffney, president of world markets at EverBank. “Also, India cutting the import taxes on gold and silver also helps as that’s going to increase demand,” Gaffney added.
Markets are anticipating a 100% chance of a rate cut by the central bank in September, according to the CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding gold.
India slashed import duties on gold and silver to 6% from 15%. Investors are also closely watching developments in the US election campaign, as Vice President Kamala Harris is expected to be the Democratic Party’s candidate to face Republican Donald Trump. Spot silver rose 0.5% to $29.36 per ounce, platinum rose 1.8% at $959.88 and palladium added 1.7% to $941.50.
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