Gold inches higher as dollar weakens on Fed rate cut hopes

Synopsis

Gold prices saw a slight increase due to a weaker dollar, fueled by growing expectations of a Federal Reserve rate cut in the coming month. Investors are closely watching President Trump's upcoming nominations to the Fed's Board of Governors. Meanwhile, Trump imposed additional tariffs on goods from India, citing the country's import of Russian oil.

Gold prices edged higher on Thursday, helped by a weaker dollar on growing expectations of a Federal Reserve rate cut next month, while investors awaited U.S. President Donald Trump's nominations to the central bank's Board of Governors.

FUNDAMENTALS

* Spot gold added 0.1% at $3,372.97 per ounce as of 0057 GMT. U.S. gold futures gained 0.3% to $3,442.20.

* The dollar index hovered near more than one-week low after a surprisingly weak U.S. jobs data last week triggered bets for Fed rate cuts from September.

* Traders are now pricing in a 95% chance of a 25-basis-point cut next month, up from 48% a week ago, according to the CME Group's FedWatch Tool.

* The Fed may need to cut rates in the near-term in response to a slowing U.S. economy, even though it remains unclear whether tariffs will continue to push inflation higher, Minneapolis Fed President Neel Kashkari said.

* Meanwhile, Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying the country directly or indirectly imported Russian oil, adding to 25% tariffs already announced.

* Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.

* On Wednesday, Trump said that over the next few days he would likely nominate a candidate to serve the remaining months of a soon-to-be-vacant position on the Fed's Board of Governors, leaving the choice of a permanent replacement for a later date.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.33% to 952.79 tonnes on Wednesday from 955.94 tonnes on Tuesday.

* Elsewhere, spot silver was steady at $37.83 per ounce, platinum gained 0.2% to $1,336.74 and palladium rose 0.7% to $1,139.98. DATA/EVENTS (GMT) 0600 Germany Industrial Output MM, Production YY SA June 0600 UK Halifax House Prices MM, YY July 0645 France Reserve Assets Total July 1100 UK BOE Bank Rate August 1230 US Initial Jobless Clm 2 August.

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