Gold prices continue to rebound, driven by expectations of potential US Federal Reserve rate cuts.
Investors are awaiting upcoming inflation data from the US on Thursday, which could significantly impact market sentiment and introduce volatility to the precious metals market.
Federal Reserve Chair Jerome Powell recently noted improved but uncertain economic indicators from June, highlighting the need for more comprehensive data to refine inflation projections.
Powell also expressed concerns about an economic slowdown and a cooling job market. These factors are driving speculation about a rate cut in September. If tomorrow’s inflation figures show further deceleration, gold may continue to appreciate as expectations for a September rate cut could intensify.
On the demand side, central banks continue to support gold prices through their purchases.
In June, India’s central bank bought over nine tons of gold, while Poland and the Czech Republic increased their reserves by four and two tons, respectively.
These actions help mitigate the impact of China’s central bank pausing its gold purchases for the second month in a row. Furthermore, exchange-traded funds (ETFs) have seen positive cash inflows for two consecutive months, reinforcing gold’s appeal as a safe-haven asset in times of uncertainty.
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