Gold futures close higher on rate cut bets

OTTAWA (dpa-AFX) – Gold futures closed sharply higher on Monday, posting a fourth straight gain amid continued optimism over a Federal Reserve rate cut in September.

A sluggish dollar also helped the yellow metal gain. The dollar index, which climbed to 103.31 in mid-morning trading, then fell to 103.09, slightly lower than its previous close.

Gold futures rose $30.30, or about 1.25%, to $2,462.40 an ounce in August, near a four-week high.

Silver futures for August closed $0.430 or about 1.56% higher at $27.917 an ounce, while copper futures for August rose to $4.0710 a pound, a gain of $0.0910.

US inflation figures, due later this week, are expected to show a decline in consumer prices.

Annual headline inflation falls to 2.9% in July from 3% in June. Its core component falls to 3.2% from 3.3% previously. Month-on-month inflation and its core component are both seen at 0.2%.

The CME FedWatch tool shows that markets are overwhelmingly expecting a Fed rate cut in September, with a 51.5% probability for a 25 basis point cut and a 48.5% probability for a 50 basis point cut.

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