Spot gold dropped 1% to $2,372.74 per ounce and U.S. gold futures declined 2.1% to $2,366.00
Gold prices dropped 1% on Thursday as investors booked profits ahead of U.S. economic data that could offer more cues on when the Federal Reserve will cut interest rates this year and by how much.
Spot gold dropped 1% to $2,372.74 per ounce by 0725 GMT. U.S. gold futures declined 2.1% to $2,366.00.
When you look from a fundamental perspective, there are no factors pressuring gold. So, it looks like we are seeing some profit-taking and from a technical perspective, prices could move lower, said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
The markets are awaiting U.S. gross domestic product data, due at 1230 GMT, and PCE data – the Federal Reserve’s favoured measure of inflation – on Friday to calibrate their expectations of the timing of rate cuts.
Traders are expecting that the Federal Reserve will deliver a long-awaited rate cut in September. Non-yielding bullion’s appeal tends to shine in a low-interest-rate environment.
If personal consumption expenditure data shows that inflation is slowing and the Federal Reserve can cut rates in September, then “we will see a resurgence in gold prices”, Wong added.
A Reuters poll showed that gold prices are poised for a fresh run to record highs in the coming months, while platinum and palladium will stay below $1,000 per ounce in 2024.
A continuation of election-related uncertainty and growing geopolitical threats will add more volatility and possibly impact wider macro variables, the World Gold Council said.
It added: This, in turn, could drive investors to evaluate how they might reduce risk in their own portfolios and draw them towards a safe-haven asset such as gold.
