Gold poised for monthly gain on soft dollar, US rate-cut hopes

Gold prices were on track for a monthly rise on Friday after striking a more than one-month peak in the previous session, supported by an overall softer dollar and increased expectations for a U.S. Federal Reserve interest rate cut in September.

Spot gold was little changed at $3,412.56 per ounce, as of 0223 GMT.

Bullion has gained 3.9% so far this month and hit its highest point of $3,423.16 since July 23 on Thursday.

U.S. gold futures for December delivery were flat at $3,473.70.

The dollar weakened 0.4% overnight, and was set for a monthly drop, making the greenback-priced gold less expensive for holders of other currencies.

“The precious metal remains a popular pick with investors ahead of what is expected to be a period of looser monetary policy in the U.S. starting next month,” said KCM Trade chief market analyst, Tim Waterer.

Fed Governor Christopher Waller on Thursday stepped up his call for cutting short-term U.S. borrowing costs, saying he would support an interest-rate cut next month and further reductions over the next three to six months.

Traders say there is an 86% 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.

Investors are now awaiting the release of the Personal Consumption Expenditures (PCE) Price Index in the U.S., Fed’s preferred inflation measure, due later in the day, for further cues on the Fed’s interest rate trajectory.

“If we see core PCE come in steady at 0.3% for the month, this will keep things on track as far as expected rate cuts from the Fed is concerned,” Waterer said.

Meanwhile, Fed Governor Lisa Cook filed a lawsuit on Thursday claiming U.S. President Donald Trump has no power to remove her from office.

Elsewhere, spot silver eased 0.3% to $38.94 per ounce, platinum fell 0.6% to $1,351.21 and palladium was steady at $1,102.21.