(RTTNews) – Gold prices turned lower on Thursday even as investors are pricing in a Federal Reserve rate cut as a done deal, as the central bank now has four months of evidence of a labor market slowdown.
Front Month Comex Gold for September delivery dipped by $6.70 (or 0.18%) to $3,636.90 per troy ounce today.
Front Month Comex Silver for September delivery jumped by 56.40 cents (or 1.37%) to $41.697 per troy ounce.
On the geopolitical front, Poland recently intercepted and shot down Russian drones that strayed into its air space. This development has increased the temperature in the ongoing Russia-Ukraine conflict.
Days before, US President Donald Trump had called on the EU to impose tariffs of up to 100% on India and China, two major purchasers of Russian oil, in order to curb Russian monetary gains and force a ceasefire.
In the Middle East, Israeli Defense Forces conducted an airstrike targeting Hamas leaders residing in Doha, killing nearly seven. With Arab leaders rushing to Qatar to express their solidarity, Qatari Prime Minister Mohammed bin Abdulrahman bin Jassim Al-Thani has called for a “collective response.”
The National Bank of Poland has announced plans to increase gold holdings to 30% of its reserve assets.
Switzerland, a top refiner of gold is proposing that its gold industry builds a refinery in the US or increase its processing capacity there as a plan to escape or reduce US tariffs (which are now at 39%).
Data released by the US Labor Department today revealed the consumer price index increased 0.4% in August and the annual inflation rate accelerated to 2.9%.
While month-on-month core consumer prices (excluding food and energy) for August rose by 0.3% from July, year-on-year core consumer price inflation held at 3.1%.
US Labor Department data also revealed that for the first week of September, initial jobless claims surged by 27,000 from the prior week to 263,000.
Continuing jobless claims in the United States remained unchanged at 1,939,000 for the week ending August.
These numbers follow yesterday’s PPI report that showed an unexpected drop in producer prices.
According to CME Group’s FedWatch Tool, investors are now betting on an 89.1% chance of a 25-basis-point interest rate cut and a 10.9% chance of a larger sized rate cut at the Fed’s upcoming September 16-17 meeting.
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