On Wednesday (July 24th), as the dollar fell, the gold price fell and investors turned their attention to US economic data to look for more signals about the central bank's interest rate cut.

#Gold closing price#

Spot gold fell 0.52%, hitting a daily low of $2,396.86/ounce, and hit a daily high of $2,432.03/ounce at 22:54 Beijing time, then plunged sharply during trading hours. Spot silver fell 1.15%, hitting a daily low of $28.9085/ounce. International precious metal futures generally fell, with COMEX gold futures down 0.41% at $2,397.50/ounce and COMEX silver futures down 0.86% at $29.08/ounce.

(Chart of Spot Gold Trend, Source: FX168)

[Market News Analysis]

According to CME's "FedWatch" data, the probability of the Fed's keeping rates unchanged in August is 93.3%, and the probability of a 25 basis point rate cut is 6.7%. The probability of the Fed keeping rates unchanged until September is 0%, the probability of a cumulative rate cut of 25 basis points is 89.6%, the probability of a cumulative rate cut of 50 basis points is 10.2%, and the probability of a cumulative rate cut of 75 basis points is 0.3%.

As the market prices in a Fed rate cut in September, the ICE Dollar Index fell 0.09% to 104.357 points in New York afternoon trading, with a daily trading range of 104.555-104.122 points. Bloomberg's Dollar Spot Index fell 0.02% to 1,256.94 points, with a daily trading range of 1,257.92-1,254.51 points.

The two-year US Treasury yield fell more than 8 basis points, with the yield curve steepening as previously mentioned 'Fed's triplets' Dudeli hopes the Fed will cut interest rates. In New York afternoon trading, the yield on the benchmark 10-year US Treasuries rose 2.15 basis points to 4.2720%, trading in the range of 4.2076%-4.2877% during the session. The two-year U.S. Treasury yield fell 8.13 basis points to 4.4101%, trading in the range of 4.4934%-4.3750% during the session. The 20-year U.S. Treasury yield rose 4.47 basis points, and the 30-year U.S. Treasury yield rose 5.20 basis points. The weakening of the dollar makes gold more attractive to buyers holding other currencies.

William Dudley, former president of the Federal Reserve Bank of New York (with permanent voting rights on the FOMC, known as the "Fed's third hand") wrote that he has long been in the camp of "maintaining high interest rates for longer periods of time," and he believes that to control inflation, short-term interest rates must be kept at or above current levels. But times have changed, and now the situation has changed, so I've changed my mind. The Fed should cut interest rates, preferably starting at next week's interest rate meeting.

Looking further ahead, Jim Wyckoff, senior market analyst at Kitco Metals, said weak dollar, falling U.S. stock prices and rising crude oil prices are supporting interest in gold and silver.

Investors are looking for clues about the Fed's interest rate cut path in the second quarter GDP report and June personal consumption data due out Thursday and Friday.

"At present, the main factor that has been favorable for gold pricing is the expectation that the Federal Reserve may actually decide to cut interest rates before September," said Chris Gaffney, chief global market analyst at EverBank. "Moreover, India's cut in gold and silver import tariffs will also be helpful as it will increase demand."

According to the latest news, India has cut import duties on gold and silver from 15% to 6%.

According to the latest report from the World Gold Council, with less than four months left before Americans vote for a new president, uncertainty is intensifying and will continue to support demand for gold as a safe haven. The World Gold Council said that this uncertainty and geo-political turbulence could continue to support the gold price. Analysts in the report said:"Given the key role of the United States in the global economy, combined with the pervasive geopolitical uncertainty, many see the upcoming presidential election as a pivotal moment with far-reaching ramifications." "Historically, U.S. elections have not been viewed as geopolitical risks, but the world and U.S. voters remain highly polarized. This in turn highlights the need for robust hedging in investor portfolios, and gold can effectively play that role." The World Gold Council noted that, historically, physical gold demand tends to increase when Democrats are in office. However, they found no statistically significant political-party advantage. "Overall, our analysis of gold and the U.S. presidential election suggests that gold is not directly affected by party affiliation or leadership changes. Instead, it underscores the relevant global macro-economic drivers and correlations with specific local dynamics that underpin gold performance."

Analysts in the report said:"Given the key role of the United States in the global economy, combined with the pervasive geopolitical uncertainty, many see the upcoming presidential election as a pivotal moment with far-reaching ramifications." "Historically, U.S. elections have not been viewed as geopolitical risks, but the world and U.S. voters remain highly polarized. This in turn highlights the need for robust hedging in investor portfolios, and gold can effectively play that role." The World Gold Council noted that, historically, physical gold demand tends to increase when Democrats are in office. However, they found no statistically significant political-party advantage. "Overall, our analysis of gold and the U.S. presidential election suggests that gold is not directly affected by party affiliation or leadership changes. Instead, it underscores the relevant global macro-economic drivers and correlations with specific local dynamics that underpin gold performance."