World gold prices fell in the trading session on August 26 as the recent strong increase showed signs of slowing down. Investors are turning their attention to US inflation data and Fed Chairman Kevin Warsh's speech to assess interest rate prospects.
As of 3:14 PM Vietnam time, spot gold price decreased by 0.70%, to 4.626.18 USD/ounce. Meanwhile, December gold futures price decreased by 0.27%, to 4.681.75 USD/ounce.
Previously, gold prices had increased sharply in recent sessions and reached their highest level since May 14 in the session of August 25. The upward momentum was supported by a new announcement by the US Treasury Department about buying back long-term government bonds, thereby reducing bond yields and boosting demand for gold.
However, after a strong rally, the market is showing signs of being more cautious. Nikos Tzabouras - senior market analyst at Tradu. com - believes that gold's upward momentum is showing signs of being technically prolonged, while investors are shifting to a cautious state before a series of events that are likely to shape the next trend of precious metals.
The immediate focus is the US Personal Consumption Price Index (PCE) report in July, expected to be released on August 26. This is an inflation measure closely monitored by the Fed in the monetary policy making process.
After a strong increase, gold's developments in the coming sessions will depend significantly on PCE data and policy messages from the Fed. If inflation shows signs of cooling down and the Fed Chairman sends soft signals, gold may continue to receive support. Conversely, a tougher message from the Fed may boost the USD and bond yields, putting pressure on the precious metal.
On the precious metals market, spot silver prices increased by 0.04%, to 68.62 USD/ounce. Platinum prices increased by 0.20%, to 1,865.70 USD/ounce, while palladium increased by 0.59%, to 1,341 USD/ounce.
