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Gold inches up as dollar drops with traders assessing inflation data
AI Summary
- Gold prices rose as the US dollar fell against major currencies and US inflation data was assessed
- Investors predict a 99% probability of a 25-basis-point rate cut by the Federal Reserve in September
- Analysts also see increasing chances of rate cuts in October and December, with the US dollar index falling 0.2% to 97.8
Gold prices rose on Wednesday as the US dollar fell against most major currencies and markets digested US inflation data and its implications for the Federal Reserve’s decision.
Government data showed that the annual growth rate of the US Consumer Price Index (CPI) held steady at 2.7% in July, below expectations for an increase to 2.8%.
The core CPI — which excludes volatile food and energy prices — rose to 3.1% in July, above expectations of a 3% increase and compared with 2.9% in June.
According to the FedWatch Tool, investors see a 99% probability of a 25-basis-point rate cut in September, compared with 94% yesterday and 57% a month ago.
Analysts also see a 61% chance of another 25-basis-point cut in October, compared with 34% a month ago, along with a 51% chance of a similar cut in December, compared with 25% a month earlier.
Elsewhere, the US dollar index fell 0.2% to 97.8 as of 20:04 GMT, after reaching a high of 98.1 and a low of 97.6.
In trading, spot gold rose 0.1% to $3,403.4 an ounce at 20:05 GMT.
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