Gold prices experienced a decline on Thursday but remained near the $2,450 per troy ounce mark, trading at $2,443 with a 0.20% loss. This drop came amid increasing speculation that the Federal Reserve may lower borrowing costs in its September meeting. The gold market‘s retreat is contrasted by a recovery in the US Dollar, supported by rising US Treasury yields.
Recent data from the US Bureau of Labor Statistics (BLS) indicated a higher-than-expected number of new unemployment benefit applications, suggesting a slowdown in economic activity. This, combined with recent data showing inflation trending towards the Fed’s 2% target, is capturing the attention of policymakers.
Despite the uptick in unemployment claims, the labor market has not shown significant shifts, according to the Labor Department’s Thursday report.
Federal Reserve officials have hinted that the central bank could be nearing a decision to lower borrowing costs as economic risks become more balanced. However, the International Monetary Fund (IMF) recommended on Thursday that the Fed should postpone any rate cuts until late 2024.
Gold prices reached an all-time high of $2,483 recently but saw a pullback as investors took profits. Additionally, former President Donald Trump’s rhetoric about imposing significant tariffs on Chinese goods has boosted demand for the US dollar.
The US Dollar Index, which measures the dollar’s performance against six major currencies, rose by 0.43% to 104.18. US Treasury yields also increased, with the 10-year Treasury note yielding 4.187%, marking a rise of more than two and a half basis points.
