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Gold steadies but marks weekly losses
AI Summary
- Gold prices held steady as the US dollar weakened, with retail sales rising in July despite high tariffs
- US consumer sentiment fell in August, while producer price inflation exceeded forecasts in July
- Investors predict a 99% probability of a 25 basis point interest rate cut by the Federal Reserve in September, with further cuts expected in October and December
Gold prices held steady during Friday’s trading as the US dollar weakened against most major currencies and markets assessed the latest US inflation data.
Figures released today showed retail sales rising 0.5% month-on-month in July, in line with expectations, indicating resilient consumer spending in the US despite high tariffs.
A University of Michigan survey also revealed that US consumer sentiment fell to 58.6 points in August from 61.7 in July, marking its first decline in four months.
Government data yesterday showed the US producer price inflation index increasing 0.9% month-on-month in July, exceeding analysts’ forecasts of a 0.2% rise.
Similar US data earlier this week showed that the annual growth rate of the consumer price index remained steady at 2.7% in July, below expectations for an increase to 2.8%.
Core inflation — which excludes volatile food and energy prices — rose to 3.1% in July, above expectations of 3% and compared to 2.9% in June.
According to the FedWatch tool, investors now see a 99% probability of a 25 basis point interest rate cut by the Federal Reserve in September, compared to 94% yesterday and 57% a month ago.
Analysts also see a 61% chance of another 25 basis point cut in October, up from 34% a month ago, along with a 51% probability of a similar cut in December versus 25% a month ago.
Meanwhile, the US dollar index fell 0.4% to 97.8 at 20:02 GMT, after hitting a high of 98.2 and a low of 97.7.
In commodities trading, spot gold was steady in negative territory at $3,380.9 an ounce at 20:03 GMT, while US gold futures posted weekly losses of around 3%.
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