Gold Price Today: Gold prices ticked lower on Wednesday (August 26), retreating after hitting a fresh three-month high in the previous session, as investors turned their attention to the US Personal Consumption Expenditures (PCE) price index due later in the day for cues on the Federal Reserve’s interest-rate outlook.
As of 5:55 am, spot gold was down 0.3 per cent, or USD 14, at USD 4,645.34 an ounce. Spot silver was nearly flat at USD 68.59 an ounce.
Gold has rallied sharply since last week, climbing from around the USD 4,300 level to near USD 4,700 this week. The gains have been supported, in part, by the US Treasury Department’s decision to double the size of liquidity-support buyback operations for longer-dated notes and bonds.
In the domestic market, gold and silver futures were not trading at the time of writing. On Tuesday, gold futures on the Multi Commodity Exchange (MCX) settled at Rs 163,029 per 10 grams, while silver futures settled at Rs 244,328 per kg.
US dollar strength adds pressure to gold prices
Meanwhile, the US dollar showed some strength against a basket of six major currencies, with the dollar index trading at 98.92. A stronger dollar tends to make gold more expensive for holders of other currencies, potentially weighing on demand for the precious metal.
PCE inflation data in focus
Market participants are now closely watching the PCE Price Index, the Federal Reserve’s preferred measure of inflation. A softer-than-expected reading could strengthen expectations of interest-rate cuts, which would generally be supportive for gold.
According to current market pricing, there is a more than 60 per cent chance of the Federal Reserve keeping interest rates unchanged at its September FOMC meeting, while the probability of a rate hike stands at around 40 per cent.
Investors will also watch comments from Fed Chair Kevin Warsh at the Jackson Hole symposium on Friday for further clues on the central bank’s policy direction.
China demand provides support
Physical demand from China is another factor supporting the gold market. According to a Reuters report, China’s net gold imports via Hong Kong rose about 11 per cent in July from the previous month, data showed on Tuesday, helped by an increase in investment demand.
China’s economic activity and gold demand remain important for the precious metal, given that the country is the world’s largest gold consumer. An improvement in Chinese demand could therefore provide further support to gold prices.
