By Daksh Grover
(Reuters) – Gold prices fell on Wednesday as the dollar strengthened, but investors were hoping that a key U.S. inflation measure due this week would provide more clarity on the size of September’s interest rate cut.
Spot gold was down 0.4% at $2,514.11 an ounce as of 0313 GMT. Bullion hit an all-time high of $2,531.60 on Aug. 20.
U.S. gold futures fell 0.2% to $2,549.00.
The dollar index rose 0.1%, making gold less attractive to holders of foreign currency. [USD/]
“The market appears to be waiting for a catalyst to spark a possible bullish breakout above the $2,532 level,” said Kelvin Wong, senior market analyst, Asia Pacific at OANDA.
Gold’s short-term trend remains strong and it could reach new highs, but in the longer term, it could face resistance around the $2,585 to $2,595 range, Wong added.
Market participants are eagerly awaiting the release of U.S. personal consumption expenditures (PCE) data, the Federal Reserve’s preferred inflation gauge, on Friday.
Traders are fully pricing in Fed easing next month, with a 67% chance of a 25 basis point cut and about a 33% chance of a further 50 basis point cut, according to the CME FedWatch tool.
Non-yielding bullion tends to thrive in a low interest rate environment.
Fed Chairman Jerome Powell last week gave the go-ahead to begin cutting interest rates soon, expressing confidence that inflation remains within the U.S. central bank’s 2% target range.
U.S. consumer confidence rose to a six-month high in August, but Americans are growing increasingly worried about the labor market, a report said on Tuesday.
China’s net gold imports via Hong Kong rose about 17% in July from the previous month, data released on Tuesday showed, marking the first increase since March.
Among other metals, spot silver fell 0.7% to $29.78 an ounce, platinum rose 0.3% to $956.00 and palladium fell 0.4% to $966.40.
(Reporting by Daksh Grover in Bengaluru; Editing by Subhranshu Sahu)
