Gold Slips, Bullish Case Not Yet Faded
Gold prices (XAU/USD) weakened to around $3,630 at the start of Friday's Asian session, retreating from this week's record high near $3,675 amid profit-taking. Despite the correction, expectations of a Fed rate cut at the upcoming meeting are expected to limit the decline.
Moderate US dollar strengthening and a wave of profit-taking weighed on this USD-denominated commodity. Market participants are still assessing the latest US inflation data for guidance on the Fed's next policy move, while awaiting the release of the University of Michigan Consumer Sentiment report later tonight.
From a fundamental perspective, the US PPI fell unexpectedly and the labor market weakened, bolstering the case for a September interest rate cut. Barclays analysts even project three 25 bps cuts in September, October, and December. Lower interest rates lower the opportunity cost of holding gold, supporting the precious metal.
Geopolitical risks also support its safe-haven appeal. Tensions in Europe escalated after Poland shot down a Russian drone that violated its territory, while Israel reportedly launched an attack on Doha, Qatar, targeting Hamas leaders. This cautious sentiment maintained interest in gold amid a short-term correction. (ayu)
Source: Newsmaker.id
