Gold rises slightly as dollar weakens ahead of CPI data

WASHINGTON (dpa-AFX) – Gold held near record highs on Wednesday, while the dollar and Treasury yields fell on expectations that the Federal Reserve will ease monetary policy in September.

Spot gold rose 0.3 percent to $2,473.10 an ounce, while U.S. gold futures rose 0.2 percent to $2,511.95.

The dollar index held steady near a four-month low and Treasuries were little changed ahead of the U.S. CPI report due later today, which could prompt the Federal Reserve to begin cutting interest rates in September.

Economists currently expect consumer prices to rise by 0.2 percent in July, after a slight decline of 0.1 percent in June.

Annual consumer price growth is expected to fall from 3.0 percent to 2.9 percent.

Annual core price growth is expected to slow from 3.3 percent to 3.2 percent.

Atlanta Fed President Raphael Bostic said Tuesday he is looking for “some more data” before backing a rate cut.

He also stressed the importance of certainty in the Fed’s decision-making process, sticking to his previous position that rate cuts “toward the end of the year” could be appropriate.

According to CME Group’s FedWatch Tool, there is currently a 54.5 percent chance that the Fed will cut rates by 50 basis points at next month’s monetary policy meeting. The chance is 45.5 percent that it will cut rates by 25 basis points.

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