Mumbai, 10 Aug (Commoditiescontrol): Gold prices softened near $2,420 per ounce on Friday, retreating after a nearly 2% surge in the previous session. Despite this dip, the precious metal continues to draw support from ongoing geopolitical risks and expectations of an impending Federal Reserve rate cut.
The safe-haven appeal of gold has been amplified by escalating geopolitical tensions, particularly with markets bracing for potential retaliatory strikes by Iran against Israel, and in the wake of a rare Ukrainian attack on Russia. These developments have kept investors on edge, bolstering gold’s attractiveness as a hedge against uncertainty.
Meanwhile, expectations of a Federal Reserve rate cut in September remain firm, although investor sentiment has become more cautious. The market is now divided on whether the Fed will opt for a 50 basis points reduction or a more modest 25 basis points cut. This shift in expectations follows a sharp decline in initial weekly jobless claims in the U.S., easing fears of a weakening labor market and potential recession. Additionally, the strong ISM services PMI for July provided further reassurance about the resilience of the U.S. economy.
Over the week, gold appears set for a decline, reversing the strong gains recorded in the prior week. As the Federal Reserve’s policymakers express growing confidence that inflation is cooling sufficiently to permit rate cuts, attention now turns to the U.S. Consumer Price Index (CPI) report due next week, which is expected to offer further insights into the central bank’s policy trajectory.
In the broader precious metals market, spot silver fell 0.9% to $27.29 per ounce, and platinum declined 0.9% to $922.05 per ounce, with both metals poised for weekly losses. Palladium dropped 1.3% to $910.25 per ounce, but remained on track for a weekly gain.
(By Commoditiescontrol Bureau: 09820130172)
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