Gold Prices Dip, Gains Support as Rate Cut Bets Increase

On Monday, gold prices softened, with limited assistance from increased outlooks for US interest rate cuts, as investors awaited more signals from the Fed and its economy.

In the Asian afternoon session, gold futures ending in August dipped by -0.28% to $2,333.15 per one troy ounce, and spot gold declined by -0.13% to $2,324.59.

The precious metal has maintained a steady position within a trading range established throughout most of this month, and it has also made some progress as the dollar plummeted.

Meanwhile, metal sectors, especially gold, have remained tight despite traders’ surging outlooks for a September rate cut after disclosing the personal consumer expenditure (PCE) price index data last week.

The greenback index shrunk about -0.39% to $105.46 on Monday, extending its declines from the previous session.

According to reports, analysts anticipate a nearly 58.00% chance of a 25-basis point slash in September.

Despite the favorable outlook for metal markets due to potential lower rates, gold prices remain stable as traders anticipated various signals from the Fed and the economy this week.

Moreover, Fed Chair Jerome Powell is scheduled to speak on Tuesday, and the minutes from the regulator’s June meeting will be released on Wednesday.

Additionally, the nonfarm payrolls report for last month is set to be released on Friday.

US Bond Yields Rise Holds Gold Prices to Surge

A mix of opposing factors failed to give gold prices significant momentum, resulting in subdued, range-bound trading on Monday.

Moreover, amid the uncertainty surrounding the Fed’s rate-cut path, traders appear hesitant to make aggressive directional bets.

Meanwhile, the US inflation rate report released on Friday reinforced market expectations that the regulators would cut interest rates in September and December.

However, recent hawkish remarks from several influential Federal Open Market Committee members indicated that the central bank is not hurrying to reduce rates.

On the other hand, the dollar persists in its post-PCE corrective pullback from a two-month high, which should support gold prices.