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Gold nears record high ahead US inflation data

The gold price hovered at a high level on Wednesday. This was due to expectations that the U.S. Federal Reserve will cut interest rates this month. Market participants were also awaiting U.S. inflation figures for clues about its monetary policy.

As of 0821 GMT spot gold was up 0.5%, at $3,643.78 an ounce. It had hit a record high on Tuesday of $3,673.95 per ounce.

U.S. Gold Futures for December Delivery were flat at $3.682.30.

Ricardo Evangelista is a senior analyst with ActivTrades. He said that gold's gains are due to expectations of Fed rate reductions, and signs of cooling on the U.S. labor market. This has weakened the U.S. dollar.

The Fed's policy meeting in September was prompted by the weakening of the labor market.

The U.S. government reported on Tuesday that the economy probably created 911,000 less jobs than originally estimated in the year through March. This suggests that the job growth had already slowed before President Donald Trump imposed aggressive tariffs on imported goods.

The independent analyst Ross Norman stated that "the outsized revisions to jobs in the U.S. almost certainly add to the pervasive sense of economic unrest and such unexpected economic shifts highlight the role of Gold as a safe haven asset."

According to CME's FedWatch Tool, the markets are pricing in 92% of a rate cut of 25 basis points, and 8% of a more significant 50 basis point cut.

Watch closely the U.S. consumer price inflation and producer price inflation figures on Thursday, both due at 1230 GMT. These will provide more clues about the Fed's rate path.

Gold that does not yield is usually a good investment in an environment with low interest rates.

The gold price has risen 38% this year after a 27% increase in 2024. This is due to a weaker dollar, central bank accumulations, dovish monetary policies and increased global uncertainty.

ANZ Group increased its gold price forecast for the year to end on Wednesday from $3,800 to $4,000 per ounce.

Silver spot increased by 0.4%, to $41.06 an ounce. Platinum rose by 0.2%, to $1 387.45, and palladium increased 0.2%, to $1 1450.73.

(source: Reuters)