Spot gold was down 0.2% to $2,515.99 an ounce as of 9:52 a.m. ET (1:52 p.m. GMT), while U.S. gold futures were down 0.4% to $2,549.60.
Gold prices rose to an all-time high of $2,531.60 on Aug. 20 and are on track to rise 3% this month. For the week, they were up 0.2%.
Data released by the Commerce Department on the same day showed the personal consumption expenditures (PCE) price index rose 0.2% last month, in line with economists’ expectations. [USD/][US/]
Alex Evkarian, chief operating officer at Allegiance Gold, said the PCE data confirms that inflation is no longer the Fed’s primary concern and that the central bank has shifted its focus to unemployment, further supporting the possibility of a September rate cut. “Next week will be pretty volatile as we look at the unemployment number,” Evkarian added. Traders slightly raised the chances of a 25 basis point Fed cut next month to 69 percent, while the chances of a 50 basis point cut fell to 31 percent following the inflation report, according to the CME FedWatch tool. Physically, gold discounts in India widened to their highest in six weeks this week as a rebound in prices slowed buying and new import quotas failed to boost Chinese demand. [GOL/AS]
“Systematic trend followers are effectively maxing out on long positions and we think positioning in Shanghai is close to all-time highs, despite fairly weak physical demand from China and inflows from Chinese gold ETFs,” said Daniel Galli, commodities strategist at TD Securities.
“So overall, we think that the initial group that turns a blind eye could create a snowball effect on subsequent divestiture activity.”
Spot silver fell 0.6% to $29.27 an ounce, while platinum was flat at $937.70.
Palladium fell 0.3 percent to $976.50, but has risen more than 5 percent so far this month.
