The price of gold was almost unchanged on Friday after it jumped by 1.27% yesterday. Meanwhile, since the beginning of the week, precious metal prices have fallen by 0.25%.
Today's price stabilization is due to the fact that investors have taken a wait-and-see position, waiting for further signals regarding the extent of the Fed's monetary policy easing at the September meeting. Yesterday, Fed policymakers expressed confidence that cooling inflation will allow for future rate cuts, which will be guided by economic data rather than stock market fluctuations. According to the CME FedWatch Tool, markets see a 55.5% probability of a 0.5% rate cut in September, and a 51.2% probability of 0.25% rate cut in November.
Gold was slightly supported by the negative dynamics of the US currency. The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) fell by 0.07% to 103.14.
In addition, experts said that in the coming months, the precious metal may benefit from increased risk aversion or from expectations of looser monetary conditions. Non-yielding bullion's appeal tends to shine in a low interest rate environment.
Gradually, the attention of market participants is shifting to the US CPI (will be released next week) to get more detailed information about the trajectory of the Fed's policy.