Gold hovers near all-time high as soft US data boosts rate cut bets

NEW YORK: Gold prices rose on Friday to hover near a record high scaled earlier in the week, as concerns over a weak labour market in the US cemented expectations of multiple interest rate cuts by the end of the year, boosting demand for the yellow metal.

Spot gold was up 0.5 percent at USD3,650.23 per ounce, as of 1027 GMT, near an all-time high of USD3,673.95 touched on Tuesday. Bullion has gained 1.8percent so far this week and was headed for its fourth straight weekly gain. US gold futures for December delivery were up 0.4 percent at USD3,689.10. “The market is preparing for the Federal Reserve to start cutting rates at the next meeting.

The expectation is that this is not only one cut, (while) US President Donald Trump’s desire for lower policy rates also lifts gold’s appeal,” said UBS analyst Giovanni Staunovo.

Trump reiterated his call on Wednesday for Federal Reserve Chairman Jerome Powell to cut benchmark interest rates. “Given these tailwinds and following the recent step higher in exchange-traded fund flows (ETFs), we now look for gold to rise to USD3,900/oz by mid next year,” he added.

US consumer prices rose 0.4 percent in August, the steepest monthly rise in seven months, while weekly jobless claims surged to their highest since October 2021 last week.

The Fed will cut its key interest rate by 25 basis points on September 17, said almost all 107 economists in a Reuters poll.

Non-yielding bullion tends to perform well in a low-interest-rate environment.

Gold prices have risen about 39percent so far this year, driven by a soft dollar, strong central bank buying, dovish monetary policy and heightened global uncertainty.

Meanwhile, China is seeking public feedback on a proposal to make it easier to import and export gold and gold products by streamlining the licence system, its central bank said on Friday.

Elsewhere, spot silver rose 1.7 percent to USD42.27 per ounce, at a 14-year high, platinum was up 0.9 percent at USD1,391.50 and palladium gained 1.6 percent to USD1,206.81. All three metals were set for weekly gains.