Gold Slips After 5-Week High as Dollar Gains Strength
Gold prices cooled off on Friday after touching a five-week high near $3,425. Traders booked profits, and a stronger U.S. dollar also pulled the metal lower. The dollar got support from upbeat U.S. GDP data and fewer jobless claims, showing the economy is still strong.
Even with this pullback, the outlook for gold stays bright. Many investors believe the Federal Reserve will cut interest rates in September, which usually supports gold since it doesn’t pay interest like bonds. Fed official John Williams also hinted at a softer policy ahead, adding more fuel to bullish sentiment.
Now, everyone is waiting for the U.S. PCE inflation data. If the numbers come in softer, it could push the Fed closer to a rate cut, lifting gold again. But a hotter reading may strengthen the dollar further and slow down gold’s rally.
Impact:
A stronger dollar from profit-taking may give USD a short-term boost, but weaker PCE data could revive gold’s rally and pressure the dollar lower.
