Gold prices were broadly steady on Wednesday as traders awaited further indications on the size of the interest rate cut the Federal Reserve may make in September.
Spot gold rose 0.22% to $2,394 per ounce at the time of writing, while US gold futures rose 0.05% to $2,432.70.
Dollar
The dollar index, which measures the greenback’s performance against a basket of six major currencies, rose 0.25%, making the greenback-denominated metal more expensive for overseas buyers, while 10-year U.S. Treasury bonds also rose.
“It’s a very noisy market right now, and gold is not moving much on its own fundamentals because of the volatility in the markets in general and the currency markets in particular,” said Kyle Rodda, a financial markets analyst at Capital.com.
Traders revised their expectations for a U.S. interest rate cut after a weak jobs report last week, expecting a rate cut of about 105 basis points by the end of the year.
But the CME Group’s FedWatch tool showed markets also now see a 65% chance of the Fed cutting rates by 50 basis points in September, compared with 85% yesterday.
Limited decline
IG analyst Yip Rong said gold’s decline could be limited by ongoing tensions in the Middle East and global recession fears, as markets await more economic data to clarify the situation in the United States.
US Secretary of State Antony Blinken said on Tuesday that the United States had sent a message to Iran and Israel that the conflict in the Middle East should not be escalated, but the Pentagon warned that it would not tolerate attacks on US forces in the region.
As for other precious metals, silver settled in spot transactions at $26.97 per ounce, platinum rose by about 0.85% to $919.9, and palladium rose by 1.47% to $887.44.
