Gold edges down as dollar firms; investors eye US economic data

(Reuters): Gold prices edged down on Thursday due to a slight uptick in the U.S. dollar index, although expectations of a Federal Reserve interest rate cut in September limited losses.

Spot gold fell 0.3% to $3,346.19 per ounce as of 0848 GMT. U.S. gold futures for December delivery were down 0.4% to $3,393.80.

The dollar rose 0.04% from an over two-week low against its rivals, making gold more expensive for holders of other currencies.

“The marginal reduction in gold since this morning could be just chalked down to a slightly firmer dollar,” said Nitesh Shah, commodities strategist at WisdomTree.

However, gold continues to see support from increasing signs that the Federal Reserve has room to cut interest rates, Shah added.

The likelihood of a Federal Reserve rate cut in September is now seen near 100%, after new data showed U.S. inflation increased at a moderate pace in July and Treasury Secretary Scott Bessent said he thought an aggressive half-point cut was possible given recent weak employment numbers.

Non-yielding gold thrives in a low interest-rate environment.

Meanwhile, benchmark U.S. 10-year Treasury yields held near a one-week low.

Investors are closely watching U.S. economic data scheduled later in the day, including the U.S. Producer Price Index and weekly jobless claims, for further cues on the direction of the Fed’s monetary policy.

“The rate cuts are very much fairly priced in but towards the end of this year we’ll start to see a market movement upwards in gold as concerns around higher indebtedness really start to move the metal higher,” Shah added.

Meanwhile, U.S. President Donald Trump threatened “severe consequences” if Russia’s President Vladimir Putin does notagree to peace in Ukraine but also said on Wednesday that a meeting between them could swiftly be followed by a second that would include the leader of Ukraine.

Elsewhere, spot silver lost 0.6% to $38.26 per ounce, platinum edged up 0.1% to $1,341.35 and palladium rose 1% to $1,133.40.