Gold prices are experiencing downward pressure, heading for their worst week since late June, largely due to hotter-than-expected US economic data. This data has dampened expectations for aggressive interest rate cuts by the Federal Reserve, influencing investor sentiment and shifting focus to upcoming events like the Jackson Hole symposium.
- Gold prices traded around 3,340 per ounce.
- The market is heading for its worst week since late June.
- Hotter-than-expected US producer price data tempered hopes for large Fed rate cut.
- Traders are now anticipating a 25-basis-point rate cut next month, followed by another in October.
- Investor focus is shifting to Jerome Powell’s comments at Jackson Hole.
- Expectations are cautious regarding a breakthrough on the Ukraine war from the Trump-Putin summit.
The shift in rate cut expectations, driven by strong economic data, has created headwinds for gold. The anticipation of less aggressive monetary easing from the Fed reduces gold’s appeal as a safe-haven asset. The market is now waiting to see if upcoming announcements by the Fed will reverse this trend. Furthermore, geopolitical factors, while present, do not seem to have a significant impact.