Gold rises as the Fed’s rate-cutting decision in September becomes increasingly likely.

On Thursday, the gold price (XAUUSD) edged up to near $2,470 per troy ounce, remaining close to record highs amid rising expectations that the Federal Reserve (Fed) will cut interest rates in September. Lower interest rates make non-yielding assets, such as gold, more appealing to investors.

Fed Governor Christopher Waller remarked that the central bank is ‘coming closer’ to cutting interest rates.

Fed officials voiced growing confidence that the rate of price increases is now more regularly aligned with policymakers’ objectives. On Wednesday, the Fed Governor Christopher Waller stated. That the US central bank is ‘coming closer’ to cutting interest rates. Meanwhile, Richmond Fed President Thomas Barkin noted that inflation easing had begun to expand and that he hoped it would continue, according to Reuters.

According to CME Group’s FedWatch Tool. The chance of a 25-basis-point rate drop at the September Fed meeting has risen from 69.7% a week ago to 93.5% presently.

Gold’s potential gains may be limited as US Treasury yields rise.

The US Dollar Index (DXY), which measures the value of the US dollar (USD) against six other major currencies, is up due to higher US Treasury yields. The DXY trades around 103.80, with 2-year and 10-year US Treasury note yields of 4.45% and 4.17%, respectively, at the time of writing. This situation may limit the rise of gold prices.

Daily Market Movers: Gold edged higher due to dovish mood around the Fed.

The New York Times reported on Wednesday that former President Donald Trump expressed support for tax cuts, lower interest rates, and higher tariffs during a meeting with House Republicans last month. These policies have the potential to inflate the economy and devalue the Greenback. Increasing demand for dollar-denominated gold.
During an interview with Bloomberg News on Tuesday. Donald Trump warned Fed Chair Jerome Powell not to lower US interest rates before the November presidential election. However, Trump also stated that if re-elected, he would let Powell to complete his term as long as he continued to “do the right thing” at The Federal Reserve.
Dr. Adriana Kugler, a member of the Federal Reserve’s (Fed) Board of Governors, recognized on Tuesday. That inflationary pressures had reduced, but highlighted. That more data is needed to justify a rate cut. According to Reuters, Kugler stated that if incoming data do not demonstrate. That inflation is moving toward the 2% objective, it may be appropriate to keep present rates in place for some time.
US retail sales in June remained generally in line with predictions. Retail sales in the United States remained stable at $704.3 billion in June, following a 0.3% increase (revised from 0.1%) in May, and were in line with market forecasts.
Fed Chair Jerome Powell said on Monday that the three US inflation readings this year “add somewhat to “Confidence” that inflation is on track to reach the Fed’s target on a long-term basis. Implying that interest rate decreases may be on the way.