Stability of Gold Price Near Its Peak Following Shocking Data

SadaNews - The price of gold stabilized just below its historical highs after unexpected data showed a decline in producer prices in the United States, bolstering expectations that the Federal Reserve will move towards easing monetary policy.

The price of an ounce recorded about $3,642, which is $32 less than the peak recorded earlier this week. American producer prices had declined for the first time in four months, increasing the markets' chances of a rate cut during the Federal Reserve meeting on September 16 and 17.

Eyes are currently on the consumer inflation data expected later today.

Three Rate Cuts Before Year-End

It is widely expected that the Federal Reserve will implement a 0.25 percentage point rate cut this month, with the possibility of two additional cuts before the end of the year, as policymakers aim to support the economy, which is facing a series of weak indicators in the labor market. Gold prices benefit from lower interest rates since it is a non-yielding asset.

The yellow metal has risen about 40% since the beginning of the year, making it one of the best-performing commodities, supported by central bank purchases, geopolitical tensions, and concerns over the impact of U.S. tariffs on the global economy. The rising bets on rate cuts have also prompted investors to inject significant liquidity into gold-backed exchange-traded funds, contributing to the price surge.

Additionally, U.S. President Donald Trump's actions against the "Fed" have supported the metal as a safe haven, especially after he challenged a judicial decision that allowed Governor Lisa Cook to remain in her position.

As of 9:54 AM Singapore time, gold stabilized at $3,642.21 per ounce after closing up 0.4% on Wednesday's session. Meanwhile, the Bloomberg Dollar Index remained stable.

Silver prices also stabilized above $41 per ounce, having jumped 42% since the beginning of the year, while both platinum and palladium held their levels steady.

In industry news, Barrick Gold Corporation agreed to sell its last gold mine in Canada to Caricity Capital for up to $1.1 billion, benefiting from high prices, with proceeds to be used to strengthen its financial position and support its commitment to return money to shareholders.