BENGALURU (Aug 13): Gold prices inched higher on Wednesday, buoyed by a weaker dollar after subdued US inflation data strengthened expectations of a September interest rate cut, though optimism over a trade truce between Washington and Beijing capped further gains.
Spot gold rose 0.1% to US$3,347.09 (RM14,132) per ounce as of 0112 GMT, while US gold futures for December delivery held steady at US$3,397.50.
Data released on Tuesday showed the US consumer price index (CPI) increased 0.2% in July, following a 0.3% rise in June. On an annual basis, CPI gained 2.7%, slightly below economists’ forecasts of 2.8%, according to a Reuters poll.
The dollar index was at 98.02 after falling about 0.5% on Tuesday. A weaker dollar makes gold and other greenback-priced commodities more attractive to overseas buyers.
Markets are now pricing in roughly a 90% probability of a September rate cut, with at least one more reduction expected before year-end. Lower interest rates tend to benefit non-yielding assets like gold.
US President Donald Trump has nominated White House adviser Stephen Miran to temporarily fill a vacant seat on the Federal Reserve board, fuelling speculation about possible presidential influence on monetary policy.
However, Kansas City Fed President Jeffrey Schmid cautioned that muted tariff impacts on inflation should be seen as evidence that current monetary policy is “appropriately calibrated,” rather than as a reason to ease rates.
The US and China have agreed to extend their tariff truce for another 90 days, averting the imposition of triple-digit duties on each other’s goods.
Attention now turns to upcoming US economic releases this week, including the producer price index, weekly jobless claims, and retail sales figures.
In other precious metals, spot silver gained 0.1% to US$37.92 per ounce, platinum added 0.2% to US$1,338.75, while palladium slipped 0.1% to US$1,128.15.
