Gold Steady Despite Dollar Strength as Another Report Shows US Inflation Remains High
Gold held steady early Friday (August 29th), despite a strengthening dollar, as a key US inflation indicator held steady last month, meeting market expectations but failing to dampen hopes for an upcoming interest rate cut.
Gold for December delivery was last traded down US$0.70 at US$3,473.60 per ounce.
The US Bureau of Economic Analysis reported that the July Personal Consumption Expenditures (PCE) Index, the Federal Reserve's preferred inflation measure, rose at a 2.6% annualized pace, unchanged from June and in line with consensus expectations, according to FactSet.
Core PCE, excluding volatile items, rose 2.9%, up from 2.8% the previous month but also meeting consensus estimates.
While the data showed inflation remains above the Fed's 2% target rate, the PCE data is unlikely to dampen market expectations for a rate cut following Fed Chairman Jerome Powell's dovish speech last week, which signaled the central bank is likely to change its policy stance. Although Powell did not indicate when a rate cut would occur, the market expects a 25 basis point rate cut to be announced at the conclusion of the central bank's policy committee meeting on September 17.
The dollar strengthened following the data, with the ICE Dollar Index last seen up 0.29 points to 98.1. US Treasury yields were also higher, with the two-year US Treasury last seen up 0.8 basis points, while the 10-year Treasury yield rose 2.4 points to 4.233%. (alg)
Source: MT Newswires
