Gold prices slipped during Thursday's Asian session after an early push towards multi-week highs around the US$3,400 level, with traders cautious ahead of United States economic data and growing speculation about a Federal Reserve rate cut in September.
By 3:40 pm AEST (5:40 am GMT), spot gold was down $8.47, or 0.3%, at US$3,389.18 an ounce.
Markets are awaiting a wave of mid-tier U.S. data releases, including the second-quarter gross domestic product (GDP) revision, jobless claims, and pending home sales, for further clarity on the Fed’s policy outlook.
The CME Group FedWatch Tool currently shows 87.2% odds of a September rate cut, following dovish signals from New York Fed President John Williams.
Williams remarked that “it is likely interest rates can fall at some point but policymakers will need to see what upcoming data indicate about the economy to decide if it's appropriate to make a cut next month”.
Gold extended Wednesday’s rebound on the back of his comments, which added to ongoing tensions between U.S. President Donald Trump and Fed Governor Lisa Cook.
Trump’s repeated criticism of the Fed’s independence has amplified expectations of further policy easing.
Broader geopolitical risks are also lending support to safe-haven demand. A simmering global trade war is intensifying, with Mexico and Canada preparing to raise tariffs on Chinese goods, while India faces 50% U.S. tariffs over its Russian oil imports.
Meanwhile, U.S.-Japan trade talks remain at a standstill after Tokyo’s negotiator reportedly cancelled a scheduled visit to Washington.
