Gold prices traded flat as the European session began on Thursday, with traders waiting for a clearer directional move. The precious metal is supported by a softer dollar, underpinned by the broad consensus that the Federal Reserve will cut interest rates in September — a view reinforced by lower-than-expected US consumer inflation data for July. However, increased risk appetite in the markets is diverting investment flows away from safe-haven assets such as gold and into risk-oriented ones like equities. This improvement in sentiment stems from hopes that Friday’s summit between Presidents Trump and Putin may pave the way for a ceasefire in Ukraine and a path towards ending the war. There is also optimism that a full-scale trade conflict between the US and China can be avoided, following the US administration’s decision to grant a three-month extension to the current trade truce. Against this backdrop, bullion prices are expected to remain close to current levels in the short term, with traders eyeing the release of US producer inflation figures later today, which are forecast to show a modest increase in costs.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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