By Anushree Ashish Mukherjee
(Reuters) – Gold prices fell on Wednesday, hurt by a stronger U.S. dollar, as investors focused on key inflation data from the world’s largest economy for clues about the size of the Federal Reserve’s potential rate cut in September.
fell 0.8% to $2,505.03 an ounce at 1:41 PM ET (1741 GMT), after falling as much as 1.1% earlier in the session. The US settled 0.6% lower at $2,537.80.
The dollar climbed 0.6%, making gold more expensive for other currency holders. [USD/]
“We’re seeing a little bit of pressure coming from a bit of a firmer dollar. And right now we’re waiting for further information to move this market one way or the other based on that inflation data,” said David Meger, director of metals trading at High Ridge Futures.
“So what we’re seeing here is a consolidation of profit taking ahead of that report.”
Investors are now looking forward to chip giant Nvidia’s (NASDAQ:) quarterly results to be announced later today and US personal consumption expenditure (PCE) figures to be released on Friday.
If Friday’s PCE numbers come in lower than expected, it could boost expectations of a dovish Fed, creating upside potential for gold, Ricardo Evangelista, senior analyst at ActivTrades, said in a note.
Markets are estimating about a 63.5% chance of a 25 basis point U.S. rate cut in September and a 36.5% chance of a 50 basis point cut, according to CME’s FedWatch tool.
Gold ETFs saw modest net inflows of 8 tonnes ($403 million) last week, led by North American funds, according to the World Gold Council.
Elsewhere, China’s net gold imports through Hong Kong rose 17% in July, the first increase since March, data showed on Tuesday.
China is a major consumer of gold and this revival in gold demand could support global gold prices.
Among other precious metals, spot silver fell 2.5% to $29.24 per ounce, platinum fell 2.1% to $933.90 and palladium fell 2.6% to $944.58.
