Gold slips on stronger dollar as market awaits US inflation data By Reuters

By Daksh Grover

(Reuters) – Gold prices fell on Wednesday as the dollar rose as investors awaited a key U.S. inflation report due this week for more clarity on the size of a likely rate cut in September .

was down 0.7 percent at $2,507.64 an ounce by 0531 GMT. Bullion hit a record high of $2,531.60 on August 20.

The US fell 0.4% to $2,542.80.

The value rose 0.3%, diminishing gold’s appeal to foreign currency holders. (USD/)

“The market seems to be waiting for a catalyst to trigger the potential bullish breakout above that $2,532 level,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.

The short-term trend for gold remains strong, with the potential to reach new highs. In the longer term, it could face resistance around the $2,585 to $2,595 range, Wong added.

Market participants are eagerly awaiting the release of US personal consumption expenditure (PCE) data, the Federal Reserve’s preferred measure of inflation, on Friday.

Traders have fully priced in a Federal Reserve cut next month, with a 67 percent chance of a cut of 25 basis points and about a 33 percent chance of a cut of more than 50 basis points, according to the CME tool FedWatch.

Non-yielding bullion tends to thrive in a low interest environment.

Fed Chairman Jerome Powell last week argued for an imminent start to rate cuts and expressed confidence that inflation is within reach of the US central bank’s 2% target.

A report on Tuesday showed that US consumer confidence rose to a six-month high in August, but Americans are growing more concerned about the job market.

China’s net gold imports via Hong Kong rose about 17 percent in July from a month earlier, the first gain since March, data showed on Tuesday.

Among other metals, spot silver was down 1.2% at $29.63 an ounce, platinum was down 0.3% at $950.80 and palladium was down 0.8% at $962 .11 USD.