Gold Prices Slip Ahead of Key U.S. Inflation Data

BENGALURU, India — Gold prices edged lower on Friday, August 29, but remain on track for a monthly gain as traders await crucial U.S. inflation data. Spot gold fell 0.3% to $3,407.14 per ounce as of 10:48 GMT, although it has gained 3.6% this August. On Thursday, gold reached $3,423.16, marking its highest value since July 23.

U.S. gold futures for December delivery decreased by 0.2% to $3,466. Han Tan, chief market analyst at Nemo.Money, remarked, “Besides the dollar’s slight advance, gold is also feeling the gravitational forces typically found around big, round numbers. Markets appear reluctant to let gold stray far from the psychological $3,400 level ahead of PCE data.”

As the dollar rose, it was still projected to fall 2% for the month. At the same time, benchmark 10-year yields were slightly above a two-week low reached on Thursday but were also expected to record a monthly loss.

All attention is focused on the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure, which is set to be released later today. Tan expressed that “as long as the uptick in inflation is not worse than feared, bullion bulls should be able to hold their ground above $3,400. However, if the PCE prints dash market expectations for Fed rate cuts this year, spot gold may slide back into the sub-$3,400 domain once more.”

Gold, which does not yield interest, typically thrives in low-interest-rate environments. Fed Governor Christopher Waller recently expressed support for cutting short-term U.S. borrowing costs, indicating he would back an interest rate cut in the coming month.

Traders anticipate an 85% probability of a 25-basis point rate cut during the Fed’s September policy meeting. Additionally, physical gold demand in India saw a slight uptick this week as jewelers began to stock up ahead of the festive season.

Meanwhile, spot silver dipped 0.5% to $38.89 per ounce, platinum fell 1.1% to $1,344.74, and palladium decreased by 0.8% to $1,093.78.