Gold prices rose as European trading got under way on Wednesday. After touching a nine-week high during the previous session, bullion experienced a slight correction and closed the day in negative territory. However, some of those losses have since been recovered, with the precious metal once again trading above the $4,400 level. Gold’s recent gains have been driven by reduced expectations of a Federal Reserve rate increase before the end of the year, a dynamic that gathered momentum following the release of disappointing US employment figures at the end of last week. Against this backdrop, investors are holding back from taking aggressive positions ahead of the release of US inflation figures for July later today. The market consensus is for consumer prices to have risen by 3.4% year on year. A lower reading would make a Fed rate increase even less likely, weigh on the dollar and potentially allow gold prices to rise further. Conversely, an upside surprise would likely have the opposite effect and drive the precious metal lower.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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