Gold prices slip slightly after recent gains; U.S. data eyed

Investing.com-- Gold prices slipped slightly Wednesday, consolidating after four days of gains, as investors digested weak U.S. economic data as well as President Donald Trump’s potential appointment to the Fed’s board.

At 04:30 ET (08:30 GMT), Spot Gold ticked down 0.4% to $3,366.50 an ounce and Gold Futures for December also lost 0.4% to $3,420.72/oz. 

Bullion has risen in the last four consecutive sessions, with marginal gains this week after a 2% jump on Friday.

Gold supported by Fed cut hopes

Gold prices have been supported of late by the potential of early interest rates cuts by the Federal Reserve, potentially next month, as a series of weak economic numbers have tended to suggest that the Trump administration’s volatile trade policies are starting to weigh.  

Data on Tuesday showed that the Institute for Supply Management’s purchasing managers’ index fell to 50.1 in July, below forecasts for 51.5, marking a near‑stall in services activity and exacerbating concerns about slowing U.S. economic growth.

This came on the heels of Friday’s weak U.S. payroll report, which saw fewer new jobs added and widespread revisions, pushing the unemployment rate to 4.2%.

The odds of a Fed rate cut odds in September currently stand just short of 90%, supporting gold prices as lower interest rates reduce the opportunity cost of non‑yielding bullion.

Meanwhile, markets weighed U.S. President Donald Trump’s decisions on an upcoming vacancy on the board of the Federal Reserve with Governor Adriana Kugler set to resign on August 8.

Central bank buying of gold slowed in Q2

Central banks added a net 22 tonnes of gold to global reserves in June, according to the World Gold Council, with the Central Bank of Uzbekistan the leading buyer with net purchases of 9 tonnes, breaking a four month selling streak.

In the second quarter, central banks added 166 tonnes to global official gold reserves, but this was still 33% lower quarter on quarter.

"This marks the second consecutive quarter during which demand has slowed, with gold’s 30% price rally this year likely contributing to the move. Despite the slowdown, central banks are likely to continue adding gold to their reserves given the still-uncertain economic environment and the drive to diversify away from the U.S. dollar," said analysts at ING, in a note.

Metal markets subdued; U.S. copper gains

Platinum Futures gained 0.8% to $1,340.95/oz, while Silver Futures edged down slightly to $37.810 per ounce.

Benchmark Copper Futures on the London Metal Exchange were up 0.5% to $9,687.40 a ton and U.S. Copper Futures rose 0.5% to $4.4080 a pound.

U.S. copper prices plunged 20% last week and have since moved largely sideways, after Trump excluded refined metal from his planned 50% import tariff on the metal.

Ayushman Ojha contributed to this article