Key points
Gold prices fell nearly 1% on Thursday as investors took profits ahead of key U.S. economic data. Spot gold dropped 0.9% to $2,377.29 per ounce by 0217 GMT, while U.S. gold futures declined 1.6% to $2,376.70.
The recent decline in gold prices seems driven by profit-taking. Investors are now waiting for the U.S. gross domestic product (GDP) reading at 1230 GMT and personal consumption expenditure (PCE) data on Friday. These reports will help predict when the Federal Reserve might cut interest rates.
See: Gold sees a decline, trading at 2375.05 as seen on the VT Markets app.
Traders expect the Federal Reserve to cut rates in September. Lower interest rates make gold more attractive since it does not pay interest. If the PCE data shows slowing inflation, it could support the case for a September rate cut, possibly boosting gold prices.
Gold prices may reach new highs in the coming months, while platinum and palladium are expected to stay below $1,000 per ounce in 2024. Ongoing election-related uncertainty and geopolitical threats could add market volatility, prompting investors to seek safe-haven assets like gold.
Also read: 4 reasons why traders flock to safe-haven gold during global political tensions
Other metals also saw declines. Spot silver fell 2.8% to $28.18 per ounce, platinum eased 0.8% to $940.40, and palladium slipped 1.5% to $918.63.
Investors should monitor the upcoming economic data closely, as it will influence market expectations and strategies. The potential for a Federal Reserve rate cut could impact gold prices, but the outcome of the data releases will be critical in shaping future market trends.
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