Mumbai, 9 Aug (Commoditiescontrol): Gold prices remained stable on Friday after surging more than 1% in the previous session, driven by ongoing geopolitical tensions and growing optimism about potential U.S. interest rate cuts. As of 0203 GMT, spot gold was steady at $2,426.00 per ounce, maintaining gains from its best performance since July 16. However, despite Thursday’s rally, gold is headed for a weekly decline, having lost nearly 3% this week as investors sold off positions alongside broader equity market losses. U.S. gold futures were unchanged at $2,465.30 per ounce.
The Federal Reserve’s outlook is increasingly leaning towards interest rate cuts as inflation shows signs of cooling. On Thursday, three central bankers emphasized that any decisions regarding the size and timing of rate cuts would be based on economic data rather than stock market volatility. The CME FedWatch Tool indicates a 55% probability of a 50-basis-point rate cut in September, with another cut expected in December. A lower interest rate environment generally enhances the appeal of non-yielding assets like gold.
Economic data released on Thursday revealed a significant drop in initial claims for state unemployment benefits, which fell by 17,000 to a seasonally adjusted 233,000 for the week ending August 3. This marked the largest decrease in nearly 11 months, surpassing economists' expectations of 240,000.
Geopolitical concerns continue to underpin the market, particularly after the recent killing of senior members of militant groups Hamas and Hezbollah, which has raised fears of potential retaliatory actions by Iran against Israel.
In other metals, spot silver edged up 0.3% to $27.65 per ounce, while platinum rose 1.1% to $940.80. Both metals are on track for weekly losses. Palladium also gained 0.61%, reaching $928.264.
(By Commoditiescontrol Bureau: 09820130172)
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