Gold prices edge higher on raised Fed rate cut hopes
Investing.com-- Gold prices edged slightly higher Wednesday, supported by mild U.S. inflation data that lifted hopes for Federal Reserve easing, while investors looked ahead to U.S.-Russia talks due later this week.
At 04:50 ET (08:50 GMT), Spot Gold was 0.4% higher to $3,363.27 an ounce and Gold Futures for December were also up 0.4% to $3,412.90/oz.
Gold prices fell sharply at the start of the week after U.S. President Donald Trump said gold bars would not face tariffs, easing supply concerns.
Gold helped raised Fed rate cut hopes
Tame July U.S. consumer prices have strengthened the case for the U.S. central bank to cut its benchmark interest rate at its September meeting.
Lower interest rates reduce the opportunity cost of holding non-yielding assets such as gold, making bullion more attractive to investors.
Markets now price in a more than 90% probability of a September cut.
However, gold’s advance was tempered by geopolitical developments, with traders closely watching Friday’s summit between Trump and Russian President Vladimir Putin in Anchorage.
The meeting will focus on the Ukraine war, and market participants are weighing the possibility of proposals for a ceasefire.
A constructive outcome could reduce demand for gold as a safe-haven asset, although any signs of failed negotiations or heightened tensions could have the opposite effect.
Metal markets subdued, silver gains
Other precious metals were subdued on Wednesday, as was the U.S. dollar after a sharp decline in the previous session.
Platinum Futures were 0.5% higher at $1,359.90/oz, while Silver Futures gained 1.3% to $38.493/oz.
Benchmark Copper Futures on the London Metal Exchange edged up 0.1% to $9,838.65 a ton, while U.S. Copper Futures traded 0.1% lower to $4.5217 a pound.
Ayushman Ojha contributed to this article