Gold eases as dollar firms, but Fed’s rate cut hopes keep buyers interested

WEB DESK: Gold prices slipped on Monday after briefly touching a near two-week high, as a firmer US dollar curbed demand. However, expectations of interest rate cuts from the Federal Reserve kept investors cautious rather than bearish.

Spot gold was down 0.2 percent at $3,364.29 an ounce by 0256 GMT, pulling back from Friday’s high, the strongest since August 11. US gold futures for December delivery also fell 0.3 percent to $3,409.60.

The dollar index edged up 0.2 percent after dipping to a four-week low last week, making bullion more expensive for buyers using other currencies.

Powell’s signal and market reaction

Gold still found some support from Fed Chair Jerome Powell’s remarks on Friday, which hinted at a possible rate cut next month. He said risks to the US job market were building, though inflation remained a concern, adding that no decision was final yet.

Markets have taken his comments as a clear sign of a policy shift. The CME FedWatch Tool shows traders now see an 87 percent chance of a quarter-point cut at the Fed’s September 17 meeting, with a total of nearly half a percentage point expected by year-end.

“Gold has decent support around $3,350 in the near term,” said Matt Simpson, senior analyst at City Index. “Powell’s dovish tone helped it build a strong base on Friday. But for a lasting rally we would need to see softer inflation and weaker jobs data. With inflation likely to stay sticky, gold’s upside may remain capped.”

Markets look to US inflation data

Asian share markets rose on Monday as investors welcomed the likelihood of fresh rate cuts in the US. Traders are now waiting for Friday’s release of personal consumption expenditure (PCE) data, which is expected to show core inflation climbing to 2.9 percent, its highest level since late 2023.

Gold often benefits in low interest rate environments, since the cost of holding the non-yielding metal falls compared to other investments.

Other precious metals

In other markets, silver edged down 0.1 percent to $38.77 per ounce. Platinum slipped 0.4 percent to $1,356.39, while palladium fell 0.4 percent to $1,122.

Gold price in Pakistan

Gold prices in Pakistan rose on Saturday, mirroring gains seen in the international market.

The price of gold per tola increased by Rs4,100, reaching Rs359,800, while 10-gramme gold was sold at Rs308,470 after a gain of Rs3,515, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

The latest upward movement comes after a minor dip on Friday, when gold per tola fell by Rs1,500 to Rs355,700. Analysts suggest the market is reacting to fluctuations in global gold rates, which saw a gain of $41 on Saturday, reaching $3,371 per ounce with a $20 premium.

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