Gold extends rise on Fed rate cut hopes, softer dollar
Spot gold rose 0.4% to $3,367.53 per ounce as of 0156 GMT. U.S. gold futures for December delivery added 0.3% to $3,416.70.
"Markets are pricing in the chance that the Fed cuts 50 basis points in September. So the dollar's weakening, gold's going up as a result, yields are also down," said Kyle Rodda, Capital.com's financial market analyst.
"The technical setup of gold looks really constructive. The trend still looks higher. We just basically need to see the market break through $3,400 level on a sustained basis."
The dollar languished near multi-week lows against its rivals, making gold less expensive for holders of other currencies. Benchmark U.S. 10-year Treasury yields held near a one-week low.
U.S. consumer prices rose only marginally in July, strengthening expectations of a Fed rate cut next month, with Treasury Secretary Scott Bessent noting there is a good chance the central bank will opt for a 50 bps reduction.
Traders now see a cut on September 17 as a near certainty, according to data compiled by LSEG, and even lay around 6% odds on a super-sized half-point trim.
Non-yielding gold thrives in a low-interest-rate environment.
Investors are awaiting the U.S. economic data due later this week, including the U.S. Producer Price Index, weekly jobless claims and retail sales data for clues into the Fed's rate path.
On the geopolitical front, Ukrainian President Volodymyr Zelenskiy said he warned U.S. President Donald Trump ahead of his talks with Vladimir Putin that the Russian leader was "bluffing" about his desire to end the war.
Elsewhere, spot silver gained 0.3% to $38.59 per ounce, platinum added 0.1% to $1,340.55 and palladium rose 1.5% to $1,139.52. (Reporting by Brijesh Patel in Bengaluru; Editing by Sumana Nandy and Subhranshu Sahu)
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