Due to the moderate inflation shown in the US Producer Price Index (PPI) data, the market's optimistic outlook on the Fed's interest rate cut path has been strengthened. On Tuesday, gold futures on comex reached a new record high for near-month contracts. The August delivery price of Comex gold rose 0.1% to $2,466.70 per ounce, rising for the fifth consecutive trading day and setting a new high for near-month contract settlement prices, while near-month August Comex silver fell 0.8% to $27.695 per ounce.
July PPI total increased less than the expected 0.1%, while the core PPI excluding food and energy was in line with expectations; monthly data showed that overall PPI rose 2.2% year-on-year, down from 2.7% in June; core PPI rose 2.4% year-on-year, down from 2.9% in June.
The US dollar fell 0.4% against other currencies, making gold more attractive to other currency holders, while the benchmark 10-year US Treasury yield fell 6 basis points to a one-week low of 3.85%.
Alex Ebkarian of Allegiance Gold said: "Despite recent profit-taking, continued geopolitical tensions, coupled with recent market volatility and rate cut expectations continue to push investors towards safe havens."
If the US consumer price index for July released on Wednesday is in line with market expectations, this upward trend may continue.
According to analysts at Commerzbank, the Middle East geopolitical tension and speculation about the US interest rate cut provide favorable factors, although these factors have weakened slightly in recent days. The bank said that the US Producer Price Index (PPI) for July showed a slight slowdown in industrial output prices compared to June. With inflation continuing to fall, it will strengthen market expectations that the Fed will begin to cut interest rates from next month.
ANZ analysts expect gold prices to reach $2,550 per ounce by the end of the year, due to central bank purchases of gold and support for physical demand, as well as an increase in gold consumption in the coming months due to increased imports of gold by China, improvements in rural income in India, and reductions in import tariffs.
ANZ added that any price weakness will boost gold's appeal and limit downside risks, and investors may also choose gold to hedge against market volatility caused by the US election.
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