Gold prices rose nearly 1% on Wednesday on a softer US dollar, with investors shifting focus to economic data due this week for fresh signals on the timing of the Federal Reserve’s rate cuts.
Spot gold was up 0.9% at $2,430.66 per ounce as of 11:00 a.m. ET, extending its gains for a third straight session. US gold futures were also 0.9% higher at $2,428.90 per ounce.
The dollar index, meanwhile, was down 0.2%, making bullion more attractive to buyers holding other currencies. The tech-heavy Nasdaq exchange also took a big hit on Wednesday.
“A weaker US dollar index, lower US stock index prices and higher crude oil prices,” are supporting buying interest for both gold and silver, said Jim Wyckoff, senior market analyst at Kitco Metals.
Investors are looking forward to the US GDP report for the second quarter due on Thursday, followed by last month’s personal consumption expenditures, for clues on the Fed’s interest rate cut path.
Markets are anticipating a 100% chance of a rate cut by the central bank in September, according to the CME FedWatch Tool.
“The main thing helping gold right now is market expectations that the Fed may actually decide to cut earlier than September,” said Chris Gaffney, president of world markets at EverBank.
“Also, India cutting the import taxes on gold and silver also helps as that’s going to increase demand,” Gaffney added.
Analysts are also predicting that higher gold prices this past quarter will give a boost to major mining companies like Newmont and Barrick Gold.
(With files from Reuters)
