Gold inches up after weak data fuels US rate cut bets
Dramatic gold price surge expected amid cautious Fed approach and weaker employment reports, signaling potential economic challenges ahead.
drifted higher on Thursday after softer-than-expected U.S. fuelled hopes that the could cut as soon as September.Spot gold was up 0.3% at $2,362.10 per ounce, as of 0200 GMT after hitting a near two-week high in the previous session. U.S. gold futures was little changed at $2,369.80.
U.S. economic data on Wednesday, including a weak services and ADP employment reports, showed a slowing economy. A separate report showed an increase in initial applications for U.S. unemployment benefits last week.
are now looking out for U.S. (NFP) data, due on Friday.
"A softer-than-expected ISM services report was the gift that Fed doves have been waiting for ahead of a NFP. A move to $2,400 is on the cards should NFP confirm the economic cracks we're seeing elsewhere," said Matt Simpson, senior analyst at City Index.
"I doubt we'll be seeing the retest 106 any time soon, so we expect traders to fade into dollar bounces and buy dips on gold."
The dollar was on the back foot, making greenback priced-bullion cheaper for other currency holders.
Markets are now pricing in a 74% chance of the Fed cutting interest rates at its September meeting, according to the CME FedWatch Tool.
Lower rates reduce the opportunity cost of holding non-yielding gold.
Meanwhile, Fed officials at their last meeting acknowledged that the appeared to be slowing but still counselled a wait-and-see approach before committing to rate cuts, according to minutes from the June 11-12 session.
Spot silver rose 0.2% to $30.54 and platinum added 0.5% at $1,002.28.
Palladium fell 0.6% to $1,023.23 after climbing to its highest level since mid-April in the previous session.
