Gold pressured by stronger dollar, with Nvidia, US inflation data in focus | World News

Gold prices fell on Wednesday under pressure from a stronger dollar and uncertainty ahead of a key U.S. inflation report that could provide more clarity on the Federal Reserve’s September policy meeting.

Spot gold was down 0.8 percent at $2,504.25 an ounce by 1113 GMT. Prices on Tuesday rose 0.3% to $2,524.57, a record high for the closing price.

The US currency stabilized on Wednesday, making goods priced in dollars less attractive to buyers using other currencies. Recent declines in the dollar have pushed the currency to its weakest in more than a year.

The dollar index, which measures performance against a basket of currencies, was last up 0.34%. (FRX/)

“There are a lot of moving parts today and items like Nvidia’s results are expected in the market for (interest) rate directional cues,” one gold trader said. “The Fed is rightly cautious right now, and that doesn’t help people with direction. Cash is king today.”

Markets are focused on upcoming US personal consumption expenditure (PCE) data, the Fed’s preferred measure of inflation, due on Friday.

Gold is up 21% so far this year, on course for its biggest annual gain since 2020, with support coming from expectations of a US interest rate cut, safe-haven demand driven by geopolitical and economic uncertainty, and robust buying of central banks.

The rally, which began in March and saw spot prices hit a record high of $2,531.60 on August 20, was initially driven by strong demand from China until high prices cut its imports and turned its attention to buying western investors.

With a widespread rate cut expected, physically-backed gold exchange-traded funds (ETFs) have resumed buying after several years of outflows and are heading for a fourth straight month of inflows in August.

Gold ETFs saw modest net inflows of 8 metric tons ($403 million) last week, led by North American funds, according to the World Gold Council.

Among other precious metals, spot silver was down 1.8% at $29.42 an ounce, platinum was down 1.4% at $940.20 and palladium was down 1.3% at $958 USD.

First publication: August 28, 2024 | 18:21 IST