Gold loses ground after flat US inflation, trade talks in focus

WASHINGTON: Gold prices dipped on Thursday as the US dollar strengthened and political uncertainty eased after President Donald Trump said it was “highly unlikely” he would remove Federal Reserve Chair Jerome Powell.

As of 0400 GMT, spot gold was down 0.2 per cent at $3,340.79 per ounce, while US gold futures fell 0.4 per cent to $3,347.10.

The dollar index rose 0.1 per cent, making dollar-priced gold more expensive for investors holding other currencies.

“Gold slipped to around $3,340 an ounce as the dollar firmed, with market nerves calming over the Fed chair’s position,” said Jigar Trivedi, senior commodity analyst at Reliance Securities.

On Wednesday, Reuters reported that Trump was open to the idea of firing Powell. However, in public comments later in the day, Trump said he had no immediate plans to dismiss the central bank chief but repeated his criticism over high interest rates.

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In economic data, US producer prices were flat in June, defying expectations of an increase. Analysts said the impact of tariffs on goods was offset by softer prices in the services sector. “The unchanged PPI points to stable wholesale inflation, indicating tariffs may not be weighing on the economy as heavily as feared,” Trivedi added.

Meanwhile, EU trade commissioner Maros Sefcovic travelled to Washington for discussions with US officials, including Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer, in a bid to ease trade tensions.

In other precious metals, spot silver rose 0.1 per cent to $37.98 per ounce. Platinum was up 0.2 per cent at $1,419.67, while palladium dipped 0.1 per cent to $1,230.14.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported a 0.33 per cent increase in its holdings to 950.79 tonnes on Wednesday.

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