Gold inches higher as dollar weakens on Fed rate cut hopes
Spot gold added 0.1 per cent at US$3,372.97 per ounce as of 0057 GMT. US gold futures gained 0.3 per cent to US$3,442.20. The dollar index hovered near more than one-week low after a surprisingly weak US jobs data last week triggered bets for Fed rate cuts from September.
Traders are now pricing in a 95 per cent chance of a 25-basis-point cut next month, up from 48 per cent a week ago, according to the CME Group's FedWatch Tool.
The Fed may need to cut rates in the near-term in response to a slowing US economy, even though it remains unclear whether tariffs will continue to push inflation higher, Minneapolis Fed President Neel Kashkari said.
Meanwhile, Trump issued an executive order on Wednesday imposing an additional 25 per cent tariff on goods from India, saying the country directly or indirectly imported Russian oil, adding to 25 per cent tariffs already announced.
Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.
On Wednesday, Trump said that over the next few days he would likely nominate a candidate to serve the remaining months of a soon-to-be-vacant position on the Fed's Board of Governors, leaving the choice of a permanent replacement for a later date.
SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.33 per cent to 952.79 tonnes on Wednesday from 955.94 tonnes on Tuesday.
Elsewhere, spot silver was steady at US$37.83 per ounce, platinum gained 0.2 per cent to US$1,336.74 and palladium rose 0.7 per cent to US$1,139.98.
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