Gold prices dipped slightly in Asian trading on Thursday as investors exercised caution ahead of key U.S. inflation data, yet the metal remained close to all-time highs on strong expectations of a Federal Reserve rate cut next week.
Spot gold was trading down 0.4% at $3,627.59 per ounce by 02:04 ET (06:04 GMT), while December U.S. gold futures slipped 0.5% to $3,664.30. Earlier in the week, gold touched a record high of roughly $3,673.95 per ounce.
Fed Rate Cut Bets Boost Gold
Investor confidence in imminent monetary easing was bolstered by weaker-than-expected U.S. producer price data and significant upward revisions to official employment figures, suggesting a softening labor market. Market participants are now pricing in a nearly certain 25-basis-point cut at the upcoming Fed meeting, with some speculating on a larger reduction.
Attention is now turning to the U.S. consumer price index (CPI) report scheduled for later Thursday. Analysts expect a 0.3% month-on-month rise for August and a year-on-year increase of 2.9%. Any stronger-than-expected inflation reading could slow gold’s momentum by tempering expectations for aggressive rate cuts.
Political Uncertainty Adds Support
Gold also found support amid concerns about the Federal Reserve’s independence. A federal judge temporarily blocked President Donald Trump from removing Fed Governor Lisa Cook, following White House efforts that raised investor fears of political interference in monetary policy. The Trump administration has appealed the ruling, prolonging uncertainty.
As a non-yielding asset, gold benefits from lower interest rates, which reduce its opportunity cost, and typically gains when the dollar weakens. On Thursday, the dollar index inched up 0.1% but remained below recent peaks.
Other Precious Metals Mixed
Other metals saw mixed movements. Silver futures edged up 0.2% to $41.67 per ounce, while platinum futures fell 0.5% to $1,008.20 per ounce. Copper prices were mostly subdued, with London Metal Exchange copper futures down 0.2% at $9,987.30 per ton, and U.S. copper futures holding steady at $4.61 per pound.
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