Gold firms as upbeat US GDP data dampens rate cut bets; focus on PCE
Gold held steady on Friday after better-than-expected U.S. GDP data dampened bets of further U.S. rate cuts, while investors awaited key inflation data later in the day.
Spot gold held its ground at $3,749.24 per ounce, as of 0817 GMT. The metal has climbed 1.9% so far this week, and hit a record high of $3,790.82 on Tuesday.
U.S. gold futures for December delivery rose 0.2% to $3,779.40.
Data released on Thursday showed the U.S. economy grew faster than estimated in the second quarter, while weekly jobless claims declined.
"Gold is holding steady around the mid-$3,700 region, given the latest display of resilience by the U.S. economy, paring bets for Fed rate cuts by end-2025, with those odds lowered by as much as 18 percentage points this week," said Han Tan, chief market analyst at Nemo.money.
Investors now see an 87% and 62% chance of rate cuts in October and December, respectively, down from 91% and 76% prior to the data, per CME FedWatch Tool, opens new tab.
All eyes are now on the personal consumption expenditures (PCE) price index data, the Federal Reserve's go-to inflation measure, due at 1230 GMT.
The report could show a 0.3% month-on-month rise and a 2.7% year-on-year jump in August, per a Reuters poll.
"Markets don’t expect an unruly showing from the incoming PCE figures, suggesting that inflation remains in check. However, should they come in notably higher than expectations, which may prompt limited declines for gold," Tan added.
Safe-haven bullion thrives in a low interest-rate environment and in times of geopolitical and economic uncertainty.
On the trade front, President Trump announced a fresh round of tariffs on imported drugs, trucks and furniture starting October 1.
Among other metals, spot silver fell 0.5% to $45.01 per ounce, platinum jumped 0.6% to $1,539.44 to hover near a 12-year high, and palladium was steady at $1,250.40. All three were headed for weekly gains.
Source: Reuters
