BENGALURU: Gold prices slipped to their lowest level in nearly two weeks on Wednesday, extending declines to a fourth straight session as markets priced in smaller rate-cut bets for the US Federal Reserve’s policy meeting this month.
Spot gold dropped 0.2% to $2,486.99 per ounce as of 9:42 a.m. ET (1342 GMT). US gold futures fell 0.2% to $2,518.30. “The pressure has largely been associated with an expectation that the Fed’s going to only cut by 25 basis points in September,” said Peter A.
Grant, vice president and senior metals strategist at Zaner Metals, adding “the prospects for a larger 50 basis point rate cut has eroded.”
Traders are confident that the US Fed will cut rates this month and are pricing in a 59% chance of a 25-basis-point cut, according to CME FedWatch tool.
This week’s US economic data, including the ADP employment and jobless claims reports on Thursday and the non-farm payrolls report on Friday, will be closely scanned for cues on the Fed’s rate-cut path.
Bullion was also pressured to cover margin calls related to equities’ weakness, said StoneX analyst Rhona O’Connell. Shares fell globally on Wednesday as tech stocks declined, hit by a record sell-off for US chipmaker Nvidia and as expectations of fading global growth bruised riskier assets.
“I still think the trend is up in the precious metals and these losses are corrective,” Grant said. The non-yielding asset has gained over 20% so far this year, hitting an all-time high of $2,531.60 on Aug. 20.
“We see ascending major oblique resistance at $2,510 per ounce and major horizontal resistance at $2,513. The initial breakout target of $2,543 remains,” Mike Ingram, market analyst at Kinesis Money, said in a note. Spot silver rose 0.3% to $28.12 per ounce.
Platinum gained 0.3% to $905.82 and palladium dipped 0.4% to $934.25.
Source: Brecorder
