Gold holds near record high as dollar and US Treasury yields decline

Gold prices stabilize close to July's peak as U.S. PPI data strengthens expectations for a Federal Reserve rate cut, with geopolitical tensions also boosting demand.

Gold prices stabilised near their July peak as both the dollar and Treasury yields eased following the latest US producer price index (PPI) data.

According to Reuters, the PPI increase in July was below expectations, reinforcing market hopes for a potential Federal Reserve rate cut in September. Spot gold dipped slightly by 0.2 percent to $2,467.80 per ounce, while US gold futures for December delivery settled 0.2 percent higher at $2,507.80.

The dollar's 0.4 percent decline against its rivals made gold more attractive for investors holding other currencies. Additionally, the 10-year Treasury yields slipped to a one-week low, further supporting gold prices. Despite some profit-taking, gold remains up 20 percent this year, driven by ongoing geopolitical tensions and market volatility. Analysts, including those from Commerzbank, suggest that a new record high for gold is likely as inflation data could provide additional momentum.

Spot silver declined 1.2 percent to $27.68 per ounce, platinum gained 0.4 percent to $939.80, and palladium increased by 1.8 percent to $936.29. Traders are now focused on upcoming U.S. consumer price index (CPI) and retail sales data for further cues on the Fed's policy direction.