Gold Holds Gains as USD Rally Falters on Fed Rate-Cut Bets

Gold sticks to gains as strong US PPI-inspired USD rally falters amid Fed rate-cut bets

Gold prices edged higher, recovering some of the previous day’s losses, as the strong US Dollar rally triggered by robust Producer Price Index (PPI) data lost momentum. Traders remain convinced that the US Federal Reserve (Fed) will resume its rate-cutting cycle in September, which supports demand for the non-yielding precious metal.

Although fresh inflation concerns have tempered expectations for aggressive Fed easing, the overall upbeat market sentiment is preventing traders from making aggressive bullish bets on gold. As a result, it is prudent to wait for stronger follow-through buying before confirming that gold (XAU/USD) has bottomed out.

Investors are now closely watching upcoming US macroeconomic data for further direction heading into the weekend.