Gold Price News: Gold Holds Above $2,500 An Ounce

Gold prices edged higher on Tuesday, holding comfortably above the $2,500 an ounce level as the markets awaited key US inflation figures ahead of a US Fed meeting next week.

Prices climbed as high as $2,519 an ounce during the day, compared with around $2,508 an ounce in late trades on Monday. Tuesday’s slight rise for gold added to Monday’s moderate gains.

The markets were waiting for Wednesday’s US inflation figures for August, for the latest signals on monetary policy from the US Fed at its upcoming meeting on September 18^th.

Data from interest rate traders suggests a roughly 69% probability of a 25 basis-point cut in interest rates at the meeting, with a 31% chance of a 50 basis-point cut. Lower rates tend to support gold as a non-yield-bearing asset.

The latest inflation reading is key, because the Fed’s ability to cut rates depends on inflation demonstrating a sustainable trend down towards its target of 2%. However, traders will also be looking ahead to Thursday’s US Producer Price Index figures as a further gauge of how inflation is shaping up.

On the technical charts, a three-month view shows that previous resistance at around the $2,480 an ounce mark now appears to have become a tentative support level. This is evidenced by several dips to that price level in the second half of August, where the market rebounded as buy-side support kicked in.