US Economic Data Pushes Gold Price Down
Gold prices declined by 1% on Wednesday after solid US economic data boosted hopes the Federal Reserve will hold interest rates steady. Spot gold dropped below $3,300 per ounce for the first time in a month, trading at $3,292.75 by midday ET. Meanwhile, US gold futures also fell by 1%, though they remained higher at $3,345.30 per ounce.
The drop followed better-than-expected employment figures for July and stronger-than-forecast second-quarter GDP data. These reports signaled a resilient US economy, reducing immediate expectations for Fed rate cuts. WisdomTree’s commodities strategist, Nitesh Shah, noted that this data supports the Fed’s decision to pause rate cuts, reinforcing confidence in economic growth.
Federal Reserve Rate Outlook and Gold Market Impact
The Federal Reserve is widely expected to keep interest rates unchanged in its upcoming meeting, despite pressure from US President Donald Trump for cuts. Traders now see a 60% chance of a September rate cut, down from 66% before the data release. Shah highlighted that political tensions over monetary policy may keep gold prices volatile, as gold usually benefits from lower rates and uncertainty.
Gold prices have risen about 25% this year due to global trade tensions and safe-haven demand. The metal reached a record high above $3,500 per ounce in late April, showing strong investor interest amid economic uncertainty.
SuperMetalPrice Commentary:
Gold’s recent decline reflects the market’s reaction to strong US economic fundamentals. However, gold remains a crucial asset amid geopolitical risks and policy uncertainties. Investors should watch Fed signals and political developments closely, as these will continue shaping gold’s trajectory. Despite short-term dips, gold’s role as a hedge against instability remains intact, making it a strategic component in diversified portfolios.
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