Gold edged up on Thursday, as softer-than-expected U.S. producer price index (PPI) data reinforced already strong expectations for a Federal Reserve interest rate cut next week, while investors awaited key consumer inflation data for further cues.
Spot gold was up 0.1% at $3,645.04 per ounce, as of 0044 GMT. Bullion hit a record high of $3,673.95 on Tuesday.
U.S. gold futures for December delivery rose 0.1% to $3,682.90.
U.S. producer prices unexpectedly fell in August due to lower trade services margins and modest increases in goods costs.
Investors are now focused on U.S. Consumer Price Index (CPI) data, with a Reuters poll forecasting a 0.3% monthly increase in August after a 0.2% rise in July. CPI is expected to have grown 2.9% year-on-year, compared with 2.7% in July.
The Federal Reserve is expected to cut interest rates at its policy meeting next Wednesday, with a quarter-percentage-point reduction fully priced in, while investors anticipate slim possibility of 50-basis-point cut, as per CME FedWatch tool.
Last week’s weaker-than-expected nonfarm payrolls report, which pointed to a cooling labor market, further strengthened expectations of monetary easing.
Gold, which does not yield interest, tends to perform well in low-interest-rate environments.
Meanwhile, on Wednesday, the U.S. President Donald Trump’s administration appealed a federal judge’s ruling that temporarily blocked the dismissal of Fed Governor Lisa Cook.
Stephen Miran, a top White House economic adviser, moved closer to becoming a Fed governor on Wednesday, furthering Trump’s efforts to exert greater influence over the central bank.
Poland shot down suspected Russian drones in its airspace on Wednesday with the backing of aircraft from its NATO allies, the first time a member of the Western military alliance is known to have fired shots during Russia’s war in Ukraine.
Elsewhere, spot silver was steady at $41.13 per ounce. Platinum gained 0.5% to $1,392.55 and palladium rose 0.7% to $1,181.56.
