By Anmol Choubey
(Reuters) – Gold prices edged down on Thursday due to a slight uptick in the U.S. dollar index, although expectations of a Federal Reserve interest rate cut in September limited losses.
Spot gold fell 0.1% to $3,353.19 per ounce as of 1050 GMT. U.S. gold futures for December delivery were down 0.2% to $3,401.60.
The dollar steadied from an over-two-week low against its rivals, making gold more expensive for holders of other currencies. [USD/]
“The marginal reduction in gold since this morning could be just chalked down to a slightly firmer dollar,” said Nitesh Shah, commodities strategist at WisdomTree.
However, growing signals that the Fed has room to cut U.S. interest rates were giving gold support, Shah said.
The likelihood of a Fed rate cut in September is now near certain, after new data showed U.S. inflation increased at a moderate pace in July and Treasury Secretary Scott Bessent said he thought an aggressive half-point cut was possible given recent weak employment numbers.
Non-yielding gold thrives in a low-interest-rate environment.
Meanwhile, benchmark 10-year U.S. Treasury yields held near a one-week low. [US/]
Investors awaited U.S. economic data scheduled later in the day, including the U.S. Producer Price Index and weekly jobless claims, for further cues on the direction of the Fed’s monetary policy.
“The rate cuts are very much fairly priced in but towards the end of this year we’ll start to see a market movement upwards in gold as concerns around higher indebtedness really start to move the metal higher,” Shah said.
Meanwhile, U.S. President Donald Trump threatened “severe consequences” if Russia’s President Vladimir Putin did not agree to peace in Ukraine at their upcoming summit, but also said the meeting could be followed by a second one which would include Ukraine’s leader.
Elsewhere, spot silver lost 0.5% to $38.30 per ounce, platinum gained 0.6% to $1,348.10 and palladium rose 0.7% to $1,130.02.
(Reporting by Anmol Choubey in Bengaluru; Editing by Bernadette Baum and Rachna Uppal)
