By Daksh Grover
BENGALURU- Gold prices slipped on Thursday as the US dollar strengthened, while investors assessed a flurry of economic data showing stalled inflation progress, suggesting the Federal Reserve might tread cautiously on further interest rate cuts.
Spot gold fell 0.3 percent to $2,627.60 per ounce.
US gold futures shed 0.5 percent to $2,627.00.
The dollar index was up 0.1 percent, reducing gold’s appeal for holders of other currencies.
The market is focusing on the Fed’s rate cuts, with the latest Core Personal Consumption Expenditures (PCE) data suggesting slowing inflation, leading to expectations that the Fed’s policy next year might be less dovish than previously expected, said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
Meanwhile, the Fed’s struggle to bring inflation back to its 2 percent target, combined with the possibility of higher tariffs under the upcoming Trump administration may constrain the US central bank’s ability to implement rate cuts next year.
Markets now see a 64.7 percent chance of a quarter-point rate cut in December, as per the CME group’s FedWatch tool.
Elsewhere, Mexican President Claudia Sheinbaum warned of retaliation if Trump enforces a 25 percent tariff, citing potential US job losses and higher consumer prices.
Gold is regarded as a safe-haven investment during periods of economic or geopolitical instability, including trade wars.
Trading is expected to be thin with US markets closed on Thursday for Thanksgiving holiday. – Reuters
