3 weeks ago
Gold edges lower as markets await key US inflation data
Gold is a shiny yellow metal that many people buy to keep their money safe.
This week its price slipped just a little, but only after reaching its highest level in more than two months.
People who trade gold are waiting for new numbers from the United States about how fast prices for everyday things are rising - something called inflation.
These numbers help everyone guess what the Federal Reserve, the country's central bank, will do next.
If the Fed raises interest rates, borrowing money becomes more expensive and gold becomes less attractive to buyers.
Last week, fewer people got jobs than expected, and that news made gold jump about 2.4% in a single day.
Now, traders think there is about a 50% chance the Fed will raise rates in September and about a 79% chance by December.
Cleveland Fed President Beth Hammack says raising rates a little at a time is a good idea to avoid bigger increases later.
President Donald Trump also asked Iran to pay money to help people hurt or killed in wars, attacks and protests.
Spot gold fell 0.3% to $4,376.31 per ounce on Tuesday after touching a more than two-month high of $4,434.84, its highest since June 5.
U.S. gold futures rose about 0.5% to settle at $4,441.10.
Markets await Wednesday's U.S. consumer price report and Thursday's producer price data, with analysts saying moderating inflation should stay supportive of gold.
Weak July U.S. jobs data triggered a 2.4% daily gain in gold and scaled back rate-hike bets; traders price about a 50% chance of a September hike and 79% for December, per the CME FedWatch Tool.
Cleveland Fed President Beth Hammack said the time was right to begin raising rates gradually, while Trump demanded Iran pay compensation for those killed in wars, attacks and protests.
- Who
- Gold traders and investors, along with the U.S. Federal Reserve (Fed), Cleveland Fed President Beth Hammack, and U.S. President Donald Trump.
- What
- Gold prices edged lower as markets awaited U.S. inflation data that could shape Federal Reserve policy, after a weak jobs report pushed gold near a two-month peak.
- Where
- Global gold markets, centered on U.S. economic data and U.S.-Iran geopolitical developments.
- When
- Tuesday, August 11, with the U.S. CPI report due Wednesday and producer price data due Thursday.
- Why
- Investors are seeking confirmation that inflation is in check, while weak July jobs data scaled back expectations of a September rate hike, supporting gold.
Traders scaling back rate-hike bets
Fed officials favoring gradual hikes
Timing of Federal Reserve rate hikes
Traders scaling back rate-hike bets
Weak July U.S. jobs data eroded expectations of a September hike, so traders price about a 50% chance for September and 79% for December; a moderation in inflation is seen as supportive for gold.
Fed officials favoring gradual hikes
Cleveland Fed President Beth Hammack believes the time is right to begin raising rates gradually to avoid the need for sharper increases later.
Key facts
- Spot gold price
- $4,376.31 per ounce, down 0.3%
- Session high (two-month peak)
- $4,434.84 per ounce, highest since June 5
- U.S. gold futures settlement
- $4,441.10, up about 0.5%
- Gold's 100-day moving average
- $4,387.92
- September Fed rate hike probability
- About 50%, per CME FedWatch Tool
- December Fed rate hike probability
- About 79%, per CME FedWatch Tool
- Upcoming U.S. data
- CPI on Wednesday; producer price data on Thursday
- Oil prices
- Held near a one-week high
Quotes
Peter Grant
vice president and senior metals strategist at Zaner Metals
“"The market is looking ahead to this week's inflation data for some kind of confirmation that inflation is in check,"”
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