By Reuters
NEW YORK: Gold prices extended gains for a fifth straight session on Wednesday, helped by prospects of lower US interest rates, while investors looked forward to President Donald Trump's decision on Federal Reserve appointments.
FUNDAMENTALS
Spot gold was up 0.1 per cent at US$3,383.67 per ounce as of 0036 GMT, after hitting a near two-week high on Tuesday. US gold futures also gained 0.1 per cent to US$3,439.20.
Trump on Tuesday said he would announce decisions soon on a short-term replacement for Federal Reserve Governor Adriana Kugler, who announced her resignation on Friday, as well as his pick for the next Fed chair.
Traders are currently pricing in two rate cuts by this year-end, beginning in September, after Friday's unexpectedly weak June hiring data, following which Trump fired the commissioner of the U.S. Bureau of Labor Statistics (BLS).
Lower US interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.12 per cent to 955.94 tonnes on Tuesday from 954.80 tonnes on Monday.
On the trade front, Trump again threatened to raise tariffs on goods from India over its Russian oil purchases, while New Delhi called his attack "unjustified" and vowed to protect its economic interests, deepening the trade rift between the two countries.
Focus now shifts to next week's US consumer price index data that could offer more cues on the Fed interest rate path.
Wall Street economists expect the underlying CPI for July to have edged up to 0.3 per cent and 3.0 per cent on a monthly and year-on-year basis, respectively, according to a Reuters poll.
Source : gold-extends-gains-rate-cut-hopes-markets-eye-fed-appointments