Spot gold fell by 0.4% to $2,507.15 per ounce, coinciding with a dollar rebound, although expectations of interest rate cuts and increased safe-haven demand kept the yellow metal close to its recent highs.

• Gold remains near its record highs amid expectations of rate cuts and haven demand. Spot prices stayed close to a record high of around $2,532 per ounce achieved earlier in August.

• Demand for gold increased as confidence grew that the Federal Reserve would begin cutting interest rates in September, following a series of cautious signals from the central bank.

• The CME Fedwatch index showed traders were split between a 25 or 50 basis point reduction. Personal Consumption Expenditures (PCE) price index data, the Fed’s preferred inflation gauge, is expected to be released on Friday and is anticipated to provide more insight into this matter.

• Lowering interest rates is positive for gold, reducing the opportunity cost of investing in non-yielding assets.

• Geopolitical risks also increased safe-haven demand for gold, as ceasefire talks in the Middle East made little progress. Meanwhile, clashes between Ukraine and Russia continued, and the escalating conflict between eastern and western forces in Libya led to higher oil prices, further unsettling markets.

-------------------------------------
For more articles click here