Gold extended gains to a third session on Thursday, supported by rising expectations of an interest rate cut by the U.S. Federal Reserve in September following tame inflation data, which also weighed on the dollar.
Spot gold rose 0.1% to $3,357.65 per ounce by 0410 GMT. U.S. gold futures for December delivery lost 0.1% to $3,406.80.
“Markets are pricing in the chance that the Fed cuts 50 basis points in September. So, the dollar is weakening, gold is going up as a result, yields are also down,” said Kyle Rodda, Capital.com’s financial market analyst.
“The technical setup of gold looks really constructive. The trend still looks higher. We just basically need to see the market break through $3,400 level on a sustained basis.”
The dollar languished near multi-week lows against its rivals, making gold less expensive for holders of other currencies. Benchmark U.S. 10-year Treasury yields held near a one-week low.
U.S. consumer prices rose only marginally in July, strengthening expectations of a Fed rate cut next month, with Treasury Secretary Scott Bessent noting there is a good chance the central bank will opt for a 50-bp reduction.
Traders now see a cut on September 17 as a near certainty, according to data compiled by LSEG, and even lay around 6% odds of a super-sized half-point trim.
Non-yielding gold thrives in a low-interest-rate environment.
Investors are awaiting more U.S. economic data due later this week, including the U.S. Producer Price Index, weekly jobless claims and retail sales data, for clues into the Fed’s rate path.
On the geopolitical front, Ukrainian President Volodymyr Zelenskiy said he warned U.S. President Donald Trump ahead of his talks with Vladimir Putin that the Russian leader was “bluffing” about his desire to end the war.
Elsewhere, spot silver was steady at $38.49 per ounce, platinum eased 0.3% to $1,336.0 and palladium rose 1.2% to $1,135.93.
