Gold prices increased on Wednesday as weaker U.S. retail sales data raised expectations of a Federal Reserve interest rate cut. Spot gold rose 0.1% to $2,331.17 per ounce. U.S. gold futures fell 0.1% to $2,345.60. The data indicated sluggish economic activity in the second quarter. The subdued U.S. dollar and weaker Treasury yields, combined with uncertainties in the economic outlook, have provided support for gold. Lower interest rates reduce the opportunity cost of holding gold. The Federal Reserve is awaiting further confirmation that inflation is cooling. Weekly jobless claims data and flash purchasing managers’ indexes are highly anticipated this week. Central bank gold purchases were on pause in May, posing a risk to the upward momentum in gold prices.
