Gold prices eased slightly on Wednesday, pausing after four days of gains as investors absorbed disappointing U.S. economic figures and considered the possible Fed board appointment by President Donald Trump.
At 04:30 ET (08:30 GMT), Spot Gold fell 0.4% to $3,366.50 per ounce, while December Gold Futures also slipped 0.4% to $3,420.72 an ounce.
After rising steadily for four sessions in a row, gold posted modest gains this week following a sharp 2% increase on Friday.
Gold bolstered by expectations of Fed rate cuts
The precious metal has recently found support amid growing expectations that the Federal Reserve may implement interest rate cuts as soon as next month. A string of weak economic data points suggests the Trump administration’s unpredictable trade policies are starting to impact the economy.
On Tuesday, the Institute for Supply Management’s purchasing managers’ index (PMI) for services fell to 50.1 in July, missing the forecast of 51.5 and signaling a near standstill in activity, further fueling worries over a slowdown in U.S. growth.
This followed Friday’s disappointing payroll report, which showed fewer jobs created than expected and extensive revisions to previous data, pushing the unemployment rate to 4.2%.
Currently, the likelihood of a Fed rate cut in September stands just under 90%, lending support to gold since lower interest rates reduce the cost of holding non-yielding bullion.
Meanwhile, markets are also watching President Trump’s upcoming decision on who will fill the Federal Reserve board vacancy left by Governor Adriana Kugler, who plans to resign on August 8.
Central bank gold purchases ease in second quarter
According to the World Gold Council, central banks increased their official gold reserves by a net 22 tonnes in June, with Uzbekistan leading purchases by adding 9 tonnes, ending a four-month streak of sales.
In the second quarter overall, central banks added 166 tonnes to reserves—still a 33% decline from the previous quarter.
“This marks the second consecutive quarter during which demand has slowed, with gold’s 30% price rally this year likely contributing to the move. Despite the slowdown, central banks are likely to continue adding gold to their reserves given the still-uncertain economic environment and the drive to diversify away from the U.S. dollar,” said analysts at ING in a note.
Other metals show mixed performance
Platinum Futures climbed 0.8% to $1,340.95 an ounce, while Silver Futures dipped slightly to $37.810 per ounce.
On the copper front, benchmark London Metal Exchange futures rose 0.5% to $9,687.40 a ton, with U.S. Copper Futures also up 0.5% to $4.4080 a pound.
Last week, U.S. copper prices tumbled 20% but have since traded mostly sideways after President Trump excluded refined copper from his planned 50% import tariff on the metal.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply