Gold prices fell by 1% to $2,372.74 per ounce on Thursday, July 25, 2024, while futures prices fell by 2.1% to $2,366.00 per ounce. On the other hand, spot silver prices dipped 3.7% to $27.91 per ounce, platinum slid 1% to $938.30, and palladium fell 2.1% to $913.25.
The price dip may be due to investors selling their holdings and booking profits ahead of the release of the US economic data. Investors and traders will be keeping their ears open for any cues about a potential interest rate cut by the Federal Reserve later this year.
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According to Kelvin Wong, Asia Pacific senior market analyst at OANDA, “When you look from a fundamental perspective, there are no factors pressuring gold. So, it looks like we are seeing some profit-taking, and from a technical perspective, prices could move lower.“
Will gold prices climb if the Fed cuts interest rates?
Investors are most likely currently waiting for the US gross domestic product data and the personal consumption expenditure (PCE) data. The PCE metric is the Federal Reserve’s preferred measure of inflation. The reading will give investors an idea of what to expect from the central bank.
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According to Wong, if the PCE data signals a cooling in inflation, and the Fed reduces interest rates by September, gold prices may climb again. A Reuters poll found that the yellow metal’s price may hit record highs in the coming months.
According to the World Gold Council, “A continuation of election-related uncertainty and rising geopolitical threats will add more volatility and likely impact broader macro variables.“
The council further added, “This, in turn, could drive investors to evaluate how they might mitigate risk in their own portfolios and draw them towards a safe-haven asset like gold.“