Yellow metal is trading higher in mid-trading today, Friday, September 12, the closing session of the week, benefiting from a weaker US dollar and rising expectations of a US interest rate cut next week. Gold is on track to post weekly gains for the fourth consecutive week of more than 2%. Gold is trading up about 0.45% at $3,650 per ounce, while silver is trading at $42.25 per ounce, up 1.66%.
Market expectations for a 25 basis point US interest rate cut, according to the CME’s FedWatch tool, are 94%. Expectations for a 50 basis point cut have fallen to below 8% following the inflation figures released yesterday, Thursday. Expectations remain for three interest rate cuts over the remainder of the year, which would mean cuts in the September, October, and December meetings. In terms of economic data, data released by the University of Michigan just moments ago showed a three-point decline in the US consumer confidence index for September, to 55.4 points, compared to 58.2 in August. Expectations had indicated a stable reading for the August reading.
This consumer confidence reading coincided with stable inflation expectations for the current year. The current conditions index fell to 61.2 from 61.2, while the expectations index fell to 51.8 from 55.9 in the August reading.
Inflation expectations for the next year remained unchanged at 4.8% in September, unchanged from the August reading, while long-term inflation expectations rose for the second consecutive month to 3.9%.