Gold prices continue to rise
Gold prices have been on the rise for the third straight week, with hopes of a potential interest rate cut by the Federal Reserve in September. The recent cooler-than-expected U.S. inflation data has fueled these hopes, causing gold to ease slightly on Friday but maintain its overall upward trajectory.
Interest rates and inflation outlook in favor of gold
The U.S. inflation data, which showed a smaller-than-expected increase in consumer prices, has shifted the inflation outlook and interest rate picture in favor of gold. This has raised the possibility of setting new record highs for gold before the end of the year. The probability of a September interest rate cut in the U.S. has increased to 93%, according to the CME FedWatch Tool, compared to 70% before the release of the data.
Potential impact of U.S. producer price index (PPI)
Investors are now eagerly anticipating the release of the U.S. producer price index (PPI) reading to further gauge the economic landscape. The PPI figures could play a crucial role in determining whether gold ends the week above or below the $2,400 level. This data point will provide additional insights into the state of the U.S. economy and its potential impact on gold prices.
Movement in other precious metals
While gold prices have been climbing, spot silver, platinum, and palladium have experienced fluctuations. Spot silver slipped on Friday, while platinum and palladium both saw declines, signaling mixed movements in the broader precious metals market. Investors will be closely monitoring these trends to assess the overall sentiment and direction of the market.
