Gold Edges Up As Dollar Drops On Fed Rate Cut Expectations

(RTTNews) - Gold prices rose on Wednesday as the US Dollar weakened and Treasury yields fell as inflation data kept rate cut hopes high.

Front Month Comex Gold for August delivery increased by $9.80 (or 0.29%) to $3,358.70 per troy ounce today.

Front Month Comex Silver for August delivery jumped by 60.00 cents (or 1.58%) to $38.499 per troy ounce today.

In the US, data released by the Mortgage Bankers Association of America revealed today that for the week ending August 8, the average contract interest rate for 30-year fixed-rate mortgages decreased by 10 bps to 6.67% and the volume of mortgage applications in the US soared by 10.9% for the first week of August.

The Mortgage Market Index increased to 281.10 points and the Purchase Index increased to 160.20 points.

For the week of August 8, the yield on a 10-year note ended at 4.27%; the 2-year note ended at 3.69%, and the 30-year note ended at 4.85%.

Yesterday's US Labor Department data on inflation revealed that the consumer prices shot up by 2.7% in the year to July.

However, core inflation, which is seen as a better indicator of economic trends, rose by 3.1%.

So far, the US Fed has held interest rates unchanged despite pressure from the markets as well as the President.

Based on the above data as well as last week's weak non-farm payrolls, expectations of an interest rate cut by the Federal Reserve have increased

US President Donald Trump is scheduled to meet Russian President Vladimir Putin in Alaska this Friday to seek ways to end Russia's war with Ukraine. If a peace accord is reached, geopolitical tensions could decrease, favoring global trade.

Investors are now readying to analyze the upcoming US economic indicators this week, including PPI, jobless claims, and retails sales numbers.

Gold price eased yesterday after Trump announced via a social media post that gold imports into the US will not be tariffed. The news of import tariffs to be levied on gold imports sent gold prices to record highs last Friday.