Gold prices edged lower in Asian trading on Thursday as investors turned cautious ahead of key U.S. inflation data, but the metal stayed close to record highs on firm expectations that the Federal Reserve will cut interest rates next week.
Spot Gold was down 0.4% at $3,627.59 per ounce as of 02:04 ET (06:04 GMT), while U.S. Gold Futures for December fell 0.5% to $3,664.30.
Prices touched an all-time high of about $3,673.95 earlier this week.
US PPI adds fuel to Fed cut bets; CPI data awaited Markets grew more confident of imminent policy easing after weaker-than-expected U.S. producer price data and large revisions to official jobs figures reinforced signs of a cooling labour market.
Traders now see a 25 basis point cut as almost certain when the Fed meets next week, with some bets on a larger move.
Attention is now fixed on U.S. consumer price inflation figures due later on Thursday, expected to show a 0.3% monthly rise in August and a year-on-year reading of 2.9%.
Any surprise to the upside could slow momentum for gold by tempering expectations of aggressive rate cuts.
Fed independence worries support haven demand Concerns over the Federal Reserve’s independence have also lent support to bullion. A federal judge has temporarily blocked President Donald Trump from removing Fed Governor Lisa Cook, after the White House sought to oust her in a move that alarmed investors about potential political interference in monetary policy.
Trump’s administration has appealed the order, prolonging uncertainty over the issue.
Gold is particularly sensitive to interest rate expectations, as lower rates reduce the opportunity cost of holding the non-yielding asset while typically weighing on the dollar.
The dollar index edged 0.1% higher on Thursday but remained off recent highs.
Other precious metals were subdued. Silver Futures gained 0.2% to $41.67 per ounce, Platinum Futures fell 0.5% to $1,008.20/oz.
Benchmark Copper Futures on the London Metal Exchange edged 0.2% lower to $9,987.30 a ton, while U.S. Copper Futures were unchanged at $4.61 a pound.
