Gold edged higher on Wednesday (August 13th), supported by a weaker dollar after weak US inflation data reinforced speculation of a September interest rate cut, while investors focused on this week's US-Russia talks on the war in Ukraine.
Spot gold rose 0.2% to $3,351.46 per ounce, as of 02:39 GMT. US gold futures for December delivery rose 0.1% to $3,401.60. "The weaker USD is allowing for a modest rise in gold prices, with the precious metal oscillating around the $3,350 level ahead of the Trump-Putin meeting on Friday," said Tim Waterer, chief market analyst at KCM Trade.
"If the Alaska meeting doesn't resolve anything and the war in Ukraine continues, gold could push back towards $3,400." The summit between US President Donald Trump and Russian President Vladimir Putin "was a listening exercise for the president," the White House said on Tuesday, dampening expectations of a quick Russia-Ukraine ceasefire agreement.
Data released on Tuesday showed that the US Consumer Price Index (CPI) rose 0.2% in July, following a 0.3% increase in June. Year-on-year, the CPI rose 2.7%. The dollar index continued its decline, making US dollar-denominated assets more affordable for holders of other currencies.
Markets are pricing in a roughly 90% chance the Federal Reserve will cut interest rates in September, with at least one additional rate cut expected by the end of the year. Non-yielding gold thrives in a low-interest environment. Easing trade tensions in the market, the United States and China have extended a tariff truce for another 90 days, preventing the imposition of triple-digit tariffs on each other's goods.
Investors are now looking ahead to other US economic data due later this week, including the US Producer Price Index, weekly jobless claims, and retail sales. Elsewhere, spot silver rose 0.7% to $38.14 per ounce, platinum rose 0.4% to $1,341.80, and palladium rose 0.3% to $1,132.89. (alg)
Source: Reuters
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