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Gold prices rose in Asian trading on Thursday, edging closer to record highs as the U.S. dollar’s rebound cooled ahead of key inflation data. The yellow metal also benefited from safe haven demand, which was bolstered by disappointing earnings from NVIDIA Corporation (NASDAQ:NVDA) that shook global equity markets.
Gold Holds Strong Ahead of U.S. Economic Data
Spot gold increased by 0.4% to $2,515.76 an ounce, while gold futures for December delivery also rose 0.4% to $2,515.91 an ounce by 00:50 ET (04:50 GMT). These gains brought gold within striking distance of the record high of $2,532.05 an ounce reached last week.
Despite struggling to surpass new highs, gold has remained well-supported by growing expectations that the Federal Reserve will cut interest rates in September. This outlook is favorable for gold, as lower interest rates reduce the opportunity cost of holding non-yielding assets like gold. Additionally, the recent softness in the dollar has provided further support for the metal, even as the dollar rebounded from its 13-month lows earlier this week.
Safe Haven Demand on the Rise
Safe haven demand has been a key factor in gold’s resilience. Ongoing tensions in the Middle East, particularly the conflict in Gaza, have shown little sign of easing, while the suspension of oil production in Libya has added to global uncertainty. These geopolitical concerns have driven investors toward gold as a secure store of value.
Further adding to gold’s appeal, shares of Nvidia—widely considered a bellwether for the artificial intelligence industry—experienced a sharp drop after underwhelming earnings results. This decline sparked losses across broader equity markets, leading investors to seek refuge in safer assets like gold.
Focus on Upcoming U.S. Economic Indicators
Looking ahead, market attention is focused on upcoming U.S. economic data, which could provide more clarity on the Federal Reserve’s policy direction. A revised reading of the U.S. gross domestic product (GDP) for the second quarter is due later on Thursday. The preliminary reading released last month indicated that the economy remained strong, and the updated figures will be closely watched for any signs of change.
As traders await these critical economic indicators, gold prices are likely to remain sensitive to fluctuations in the dollar and broader market sentiment, with the potential for further gains if inflation data supports the case for rate cuts.
