Gold Prices May Strengthen Somewhat if Interest Rates to Slow Their Pace

The U.S. labor market remains the main driver of gold prices. The Fed has sent clear signals that it needs to see confirmed weakness in the labor market to be confident that inflation is on its path to fall back to its 2% target. Gold prices hovered near a one-month high today, on August 31, extending gains for a 6th day in a row, but prices remained in a relatively tight range as investors braced for U.S. inflation data that could affect the Federal Reserve and remained cautious Attitude stance Reserve Bank's next tariff decision.

Spot gold was up 0.17% at $1,945.45 an ounce by 08:11 ET. Bullion has gained about 7% so far this year as investors hope the Fed's current tightening cycle is coming to an end.

The key level to watch for gold is $1,930/oz; a solid break above $1,930 could pave the way back to $1,950 an ounce. Also, gold will likely continue its established negative correlation between bond yields and price, and if, hypothetically, the interest rates will drop in the U.S., only then altered reality should continue to drive gold prices higher.

Among other precious metals, platinum and palladium edged up, while silver fell.