Gold prices extended gains above US$3,350 in Thursday's Asian session, posting the third consecutive day of gains amid a weaker United States dollar and expectations of Federal Reserve interest rate cuts.
By 4:15 pm AEST (6:15 am GMT), spot gold edged up $2.97, or 0.1%, to US$3,358 per ounce.
Traders have focused on mild U.S. inflation data and soft employment numbers, which have increased expectations for a September rate cut by the Fed and the possibility of further reductions later this year.
Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, providing support for the yellow metal.
The CME Group FedWatch Tool indicates a 95.8% probability of a September Fed rate cut following the July inflation data, reflecting limited pass-through from President Donald Trump’s import tariffs.
However, easing trade tensions may constrain further upside. Trump recently agreed to extend the delay on implementing sweeping tariffs on China for another 90 days, just hours before the previous agreement expired, reducing demand for gold as a traditional safe-haven asset.
Analysts will also monitor the upcoming U.S. producer price index (PPI) and weekly initial jobless claims report for additional cues on the outlook for both the dollar and gold prices.
