Gold prices hovered near an all-time high on Friday, and poised for a weekly gain due to a weaker dollar, while investors focused on US economic data that could offer additional insights into the Federal Reserve’s policy decision.

Gold price per tola decreases Rs1,000 in Pakistan

Fundamentals

• Spot gold was flat at $2,558.19 per ounce, as of 0051 GMT, and has climbed 2.5% for the week so far.

• Bullion rose more than 1% in the previous session and hit a record high, after US data signalled an economic slowdown.

• US gold futures edged 0.2% higher to $2,586.60.

• The dollar weakened 0.3%, making gold less expensive for other currency holders.

• Data on Thursday showed that the US producer prices increased slightly more than expected in August, but the trend remained consistent with subsiding inflation.

• Additionally, on the labour market side, data showed the number of Americans filing new applications for unemployment benefits increased marginally last week.

• The International Monetary Fund said on Thursday it was appropriate for the US Federal Reserve to begin a long-awaited monetary easing cycle at its meeting next week as upside risks to inflation have subsided.

• Markets are currently pricing in an 57% chance of a 25-basis-point US rate cut at the Fed’s Sept. 17-18 meeting, and a 43% chance of a 50-bps cut, the CME FedWatch tool showed. It would be the first rate cut since March 2020.

• Lower rates reduce the opportunity cost of holding a zero-yield bullion.

• Traders will brace themselves for the consumer sentiment (prelim) data for any further clues.

• SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.53% to 870.78 tons on Thursday.

• Spot silver was up 0.1% at $29.94 per ounce, platinum gained 0.8% to $985.20 and palladium climbed 0.8% to $1,055.64. Reuters