Aug 29 (Reuters) – Gold prices gained around 1% on Thursday, fuelled by strong expectations of a Federal Reserve rate cut in September with investors focusing on U.S. inflation data for further insights on the potential size of the cut.
Spot gold rose 0.9% to $2,524.45 per ounce by 1:52 p.m. ET (1752 GMT). U.S. gold futures settled 0.9% higher at $2,560.3.
“The market seems to be pencilling in a rate cut no matter what, and now it is simply a question of what size – how big of a rate cut does the Fed do,” said Everett Millman, chief market analyst with Gainesville Coins.
“My expectation right now is that at least until we get to the next Fed meeting, the gold market will probably chop sideways, but there does seem to be that strong floor of support because of geopolitics.”
Gold is used as a safe investment during times of economic and geopolitical uncertainties.
Investors are now looking at Personal Consumption Expenditures (PCE) price index, the Fed’s preferred measure of inflation, on Friday.
Spot silver firmed 1.5% to $29.53. Platinum gained 1.3% to $942.06 and palladium was up 3.5% to $979.72.
“As a trend, the market has very much turned away from battery EVs and much more into standard ICE vehicles and hybrids,” said Bart Melek, head of commodity strategies at TD Securities.
Both platinum and palladium are used by automakers in catalytic converters to reduce exhaust emissions.
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Reporting by Anushree Mukherjee, Ashitha Shivaprasad, and Anjana Anil in Bengaluru; Editing by Krishna Chandra Eluri
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