Gold edges higher as markets await key US inflation data

SINGAPORE: Gold prices inched higher on Tuesday, recovering slightly after a steep drop in the previous session, as investors awaited US inflation figures that could shape the Federal Reserve’s next move on interest rates.

Spot gold rose 0.2 percent to $3,350.03 per ounce by 0146 GMT, while US gold futures for December delivery held steady at $3,402.80.

The metal had fallen 1.6 percent on Monday, with futures slipping more than 2 percent, after US President Donald Trump announced that tariffs would not be imposed on imported gold bars, a move that eased market concerns.

Fed rate cut expectations rise ahead of CPI report

According to OANDA senior market analyst Kelvin Wong, traders are now focused on the likelihood of a Fed rate cut in September, which markets have largely priced in.

“If the core CPI data comes in slightly below expectations, it could strengthen the case for a rate cut,” he said, noting that lower interest rates reduce the cost of holding gold. Wong added that the US 10-year Treasury yield remains below a key resistance level, which could further support prices.

The US Consumer Price Index (CPI) report is due at 1230 GMT. Economists polled by Reuters expect core CPI to have risen 0.3 percent in July, pushing the annual rate to 3 percent, still above the Fed’s 2 percent target.

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The CME FedWatch Tool shows traders assigning about an 85 percent chance of a rate cut next month. Gold typically benefits from periods of economic uncertainty and lower interest rates.

Markets are also watching for developments on who might replace Fed Chair Jerome Powell when his term ends in May next year. Trump has repeatedly criticised the Fed for holding rates steady in recent meetings.

A White House official said Trump signed an executive order on Monday to extend a pause on sharply higher tariffs on Chinese imports for another 90 days, though the announcement drew little market reaction.

In other precious metals, spot silver rose 0.6 percent to $37.81 per ounce, platinum gained 0.6 percent to $1,334.24, and palladium advanced 0.7 percent to $1,143.93.

Gold price in Pakistan

Gold prices in Pakistan saw a sharp drop on Monday, reflecting losses in the international market.

According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold fell by Rs3,600 per tola, bringing it down to Rs358,800. The rate for 10 grammes gold also declined by Rs3,086, settling at Rs307,613.

This decline comes just two days after a smaller drop of Rs300 per tola on Saturday, which had closed the week at Rs362,400.

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