Aug 27 (Reuters) – Gold prices rose on Tuesday driven by a weaker dollar, with investors awaiting inflation data that might provide insights on the scale of an expected interest rate cut by the Federal Reserve next month.
Spot gold rose 0.3% to $2,524.94 per ounce, as of 2:57 p.m. ET (1857 GMT), shy of the record high of $2,531.60 hit last week. U.S. gold futures settled 0.1% lower to $2,552.90.
The dollar index fell 0.3%, making gold more attractive for other currency holders .
“Biggest thing right now is the drop in the U.S. dollar that we’ve seen over the last hour has given gold a little bit of a push here, and you’re seeing a lot of buying on this dip,” said Bob Haberkorn, senior market strategist at RJO Futures.
Investors now await the release of the Personal Consumption Expenditures (PCE) data, a key inflation report and the Fed’s preferred inflation gauge, scheduled for Friday.
A surprise of hotter-than-expected inflation data could slightly influence the Fed’s policy, but its assured they will cut interest rates in September and possibly again this year, Jim Wyckoff, senior market analyst at Kitco Metals, said.
Bullion remains above the $2,500 per-ounce psychological level and is heading for its best year since 2020, driven by investor optimism about upcoming U.S. rate cuts and lingering concerns about the Middle East conflict.
“Much of the positive news for gold may therefore already have been priced in. We feel vindicated in our view that gold has no significant upside potential for the time being,” Commerzbank wrote in a note.
“We see more room for the three other precious metals that have not caught up with gold in recent weeks”
Among other metals, spot silver rose 0.6% to $30.07 per ounce, while platinum fell 0.1% $960.90 and palladium gained 1.8% to $975.58.
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Reporting by Anushree Mukherjee in Bengaluru; Editing by Krishna Chandra Eluri and Mohammed Safi Shamsi
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