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Gold is lacking momentum at the moment as prices trend lower towards $1,700 an ounce, but some analysts still believe that chances for further downside are limited.
Gold prices are modestly down on Wednesday but off lows. During the US session, gold briefly rebounded from the one-month low at $1,709 and rose to $1,723. Then, gold futures fell again to trade at $1,708 per ounce at the time of writing; its lowest in over a month.
Although it was subject to some pressure during Wednesday’s US session, the US dollar ended August with robust gains. On Wednesday also, the US dollar edged higher against most major rival currencies.
Safe-haven currencies eased modestly against their American rival, with USD/CHF now at 0.9780 and USD/JPY at 138.90.
Crude oil prices edged lower after the US Defense Department Spokesman announced that G7 finance ministers would discuss Russia’s oil price cap on Friday. WTI settled at $89.10 a barrel.
Economic Data
Earlier during the US session, the US dollar briefly suffered from some pressure on the ADP report, showing that private sector payrolls added only 132K new jobs in August.
Later, the USD recovered ahead of the close as US Treasury yields that surged to weekly highs while US indexes closed in the red territory.
The EU Harmonised Index of Consumer Prices (HICP) rose by 9.1% YoY in August, up from 8.9% in July, while the core reading for the same period jumped to 4.3% from 4% in the previous month. Both figures were above the market’s expectations and at record highs, somehow justifying the hawkish shift from European policymakers.
Other Developments
The EUR/USD pair advanced for a third consecutive day and settled around 1.0050 and parity was revisited on the day.
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