Gold prices experienced a downturn as the US dollar index reached its highest point since September 11, impacting the value of the greenback-denominated bullion. Despite this slip, gold prices remained close to the all-time high achieved on Tuesday, with investors keenly awaiting crucial inflation and jobs data from the United States.
The forthcoming data is expected to influence the Federal Reserve’s monetary policy decisions. The Fed’s preferred gauge of underlying inflation is anticipated to show a slower growth rate for the previous month. Such a deceleration would strengthen the case for potential interest rate cuts, a move that could benefit non-yielding assets like gold.
Gold and silver have demonstrated strong performance among major commodities this year, driven by a combination of supportive elements. These include the Federal Reserve’s recent rate cut and consistent demand from central banks. On Tuesday, gold prices surged by as much as 1.2 per cent following reports that China intends to become a custodian of foreign sovereign bullion reserves.
As of 5pm in New York on Wednesday (7am Thursday AEST), spot gold had decreased by 0.7 per cent to $US3,736.16 an ounce, reflecting the day’s trading activity and the influence of the stronger US dollar.
