Gold prices fell by over 1% on Wednesday, influenced by a stronger U.S. dollar as investors awaited crucial inflation data from the largest economy to gauge the potential size of a Federal Reserve interest-rate cut in September. By 12:25 a.m. ET (1625 GMT), spot gold had decreased by 1.1% to $2,496.63 per ounce, while U.S. gold futures dropped by 0.9% to $2,531.20. The dollar's 0.6% rise made gold more costly for holders of other currencies.
David Meger, director of metals trading at High Ridge Futures, noted that the market is experiencing some pressure due to a slightly stronger dollar and is awaiting further data to influence its direction based on inflation figures. He described the current market activity as profit-taking consolidation ahead of the report.
Investors are now focusing on Nvidia's upcoming quarterly earnings and the U.S. personal consumption expenditure (PCE) data scheduled for Friday. Lower-than-expected PCE numbers could enhance expectations of a more dovish Federal Reserve stance, potentially benefiting gold, according to Ricardo Evangelista, senior analyst at ActivTrades.
The CME FedWatch tool indicates a 63.5% likelihood of a 25-basis point U.S. rate cut in September and a 36.5% chance of a 50-bps cut. Gold ETFs experienced modest net inflows of 8 metric tons ($403 million) last week, primarily driven by North American funds, according to the World Gold Council. Additionally, China's gold imports through Hong Kong increased by 17% in July, the first rise since March, which could support global gold prices given China's significant gold consumption.
In other precious metals, spot silver fell by over 3% to $29.07 per ounce, platinum dropped by 2.3% to $931.85, and palladium decreased by 2.8% to $942.81.
