Spot Gold held steady above $2,490 per ounce on Wednesday, after retreating in previous sessions, as investors assessed new economic data and its impact on the Federal Reserve’s interest rate outlook.
ISM data showed that US manufacturing activity fell more than expected in August, highlighting the sector’s weakness and challenging the notion that the US economy remains resilient to higher borrowing costs. Meanwhile, expectations for a dovish shift were tempered by a sharper-than-expected rise in prices for goods producers.
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Investors are now awaiting additional economic data, including the key jobs report later this week, which will provide insights into the labor market’s performance since the subdued July report and the significant downward revision to payroll figures for the year ending March 2024. Markets still anticipate 100 bps in rate cuts from the Fed over its remaining three meetings this year, which would lower the opportunity cost of holding non-interest-bearing assets.
