Gold gains nearly 1pc as investors zero in on Fed cuts, inflation data

Gold prices gained around 1 per cent on Thursday, fuelled by strong expectations of a Federal Reserve rate cut in September with investors focusing on US inflation data for further insights on the potential size of the cut.

Spot gold rose 0.9 per cent to $2,524.45 per ounce by 1:52 pm ET (1752 GMT). US gold futures settled 0.9 per cent higher at $2,560.3.

"The market seems to be pencilling in a rate cut no matter what, and now it is simply a question of what size – how big of a rate cut does the Fed do," said Everett Millman, chief market analyst with Gainesville Coins.

"My expectation right now is that at least until we get to the next Fed meeting, the gold market will probably chop sideways, but there does seem to be that strong floor of support because of geopolitics."

The Israeli military said its troops killed five Palestinian militants who were hiding inside a mosque in the West Bank city of Tulkarm.

Gold is used as a safe investment during times of economic and geopolitical uncertainties.

Investors are now looking at Personal Consumption Expenditures (PCE) price index, the Fed's preferred measure of inflation, on Friday.

Spot silver firmed 1.5 per cent to $29.53. Platinum gained 1.3 per cent to $942.06 and palladium was up 3.5 per cent to $979.72.

"As a trend, the market has very much turned away from battery EVs and much more into standard ICE vehicles and hybrids," said Bart Melek, head of commodity strategies at TD Securities.

Both platinum and palladium are used by automakers in catalytic converters to reduce exhaust emissions.