Gold prices eased slightly on Wednesday, pulling back after four straight days of increases as traders assessed disappointing U.S. economic reports and anticipated President Donald Trump’s upcoming Federal Reserve board nomination.
At 04:30 ET (08:30 GMT), Spot Gold declined 0.4% to $3,366.50 per ounce, while December Gold Futures also dipped 0.4%, settling at $3,420.72 per ounce. The precious metal had enjoyed a steady climb over the past four sessions, including a notable 2% surge last Friday.
Fed Rate Cut Expectations Support Gold
The recent uptrend in gold has largely been driven by growing speculation that the Federal Reserve may reduce interest rates as soon as next month. A series of lackluster economic data has reinforced concerns that trade tensions under the Trump administration are beginning to impact growth.
On Tuesday, the Institute for Supply Management’s purchasing managers’ index dropped to 50.1 in July, missing the forecast of 51.5. This indicated near stagnation in the services sector and added to worries about slowing U.S. economic momentum.
This followed last Friday’s weaker-than-expected U.S. payroll data, which showed fewer jobs created and significant revisions, pushing the unemployment rate to 4.2%.
The probability of a Fed rate cut in September now approaches 90%, which bolsters gold prices by lowering the opportunity cost of holding non-yielding assets like bullion.
Investors are also watching closely as President Trump prepares to nominate a successor for Federal Reserve Governor Adriana Kugler, who will resign on August 8.
Central Bank Gold Purchases Slow
According to the World Gold Council, central banks increased their gold reserves by a net 22 tonnes in June, with Uzbekistan leading purchases at 9 tonnes—breaking a four-month trend of selling.
Overall, central banks added 166 tonnes of gold to official reserves in the second quarter, though this was 33% less than the previous quarter.
“This marks the second consecutive quarter during which demand has slowed, with gold’s 30% price rally this year likely contributing to the move. Despite the slowdown, central banks are likely to continue adding gold to their reserves given the still-uncertain economic environment and the drive to diversify away from the U.S. dollar,” analysts at ING commented.
Metals Market Activity Mixed
Platinum Futures rose 0.8% to $1,340.95 per ounce, while Silver Futures slipped slightly to $37.81 an ounce.
Copper prices on the London Metal Exchange gained 0.5% to $9,687.40 per ton, with U.S. copper futures also rising 0.5% to $4.4080 per pound. Copper has been volatile recently, dropping 20% last week before stabilizing, after Trump exempted refined copper from a planned 50% import tariff.
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