Gold holds ground as investors await US data for more Fed cues

Gold prices remained stable on Thursday, as market participants held back from placing big bets ahead of U.S. economic data that could help shed further light on the Federal Reserve’s interest rate trajectory.

Spot gold held its ground at $3,390.27 per ounce, as of 0257 GMT, after hitting its highest point since August 11 earlier in the session.

U.S. gold futures for December delivery were flat at $3,447.40.

“We’ve got a lot of positive interest for gold because of that sort of issues with institutional trusts and risks about Fed’s independence,” said Kyle Rodda, Capital.com’s financial market analyst.

Investors are now awaiting the release of the Personal Consumption Expenditures (PCE) Price Index, the preferred inflation measure of the U.S. Fed, scheduled for Friday.

“But we’re really looking for something more sort of to push the price above critical level of $3,400 … the U.S. PCE data will be super significant. We are still bullish on gold. I think all the fundamentals moving in the right direction,” he added.

Economists polled by Reuters expect the PCE price index to rise 2.6% in July, matching the climb from the prior month.

Markets are anticipating an over 88% chance of a 25-basis-point rate cut at the Fed’s policy meeting next month, according to CME FedWatch Tool.

Non-yielding gold typically performs well in a low-interest-rate environment.

New York Fed Bank President John Williams said on Wednesday it is likely interest rates can fall at some point but policymakers will need to see what upcoming data indicate about the economy to decide if it’s appropriate to make a cut next month.

Elsewhere, spot silver was up 0.3% at $38.72 per ounce, platinum was steady at $1,348.07 and palladium rose 0.3% to $1,095.26.