GOLD
Gold prices edged up in early Wednesday trading, nearing the all-time high reached in July. Yesterday's US Producer Price Index numbers came in lower than expected, leading to a drop in treasury yields and a weaker dollar.
However, the effect on gold prices was subdued as traders opted to hold off until the release of July's US consumer inflation data today. If the report confirms a slowdown in inflation, we could see a more pronounced response from gold traders.
Expectations of a 50 basis point rate cut by the Federal Reserve in September would likely rise, pushing down treasury yields and the dollar, thereby boosting the precious metal's price.
This momentum could even propel gold to a new historical high, with additional support coming from escalating geopolitical tensions in the Middle East, which are driving demand for haven assets.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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