GOLD prices hovered near an all-time high on Friday (Sep 13), and poised for a weekly gain due to a weaker US dollar, while investors focused on US economic data that could offer additional insights into the Federal Reserve’s policy decision.
Spot gold was flat at US$2,558.19 per ounce, as at 0051 GMT, and has climbed 2.5 per cent for the week so far.
Bullion rose more than 1 per cent in the previous session and hit a record high, after US data signalled an economic slowdown.
US gold futures edged 0.2 per cent higher to US$2,586.60.
The US dollar weakened 0.3 per cent, making gold less expensive for other currency holders.
Data on Thursday showed that the US producer prices increased slightly more than expected in August, but the trend remained consistent with subsiding inflation.
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Additionally, on the labour market side, data showed the number of Americans filing new applications for unemployment benefits increased marginally last week.
The International Monetary Fund said on Thursday it was appropriate for the US Federal Reserve to begin a long-awaited monetary easing cycle at its meeting next week as upside risks to inflation have subsided.
Markets are currently pricing in an 57 per cent chance of a 25-basis-point US rate cut at the Fed’s Sep 17 to 18 meeting, and a 43 per cent chance of a 50-bps cut, the CME FedWatch tool showed. It would be the first rate cut since March 2020.
Lower rates reduce the opportunity cost of holding a zero-yield bullion.
Traders will brace themselves for the consumer sentiment (prelim) data for any further clues.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.53 per cent to 870.78 tons on Thursday.
Spot silver was up 0.1 per cent at US$29.94 per ounce, platinum gained 0.8 per cent to US$985.20 and palladium climbed 0.8 per cent to US$1,055.64. REUTERS
