Early on Tuesday, gold prices dropped as traders continued to speculate about the possibility of a September rate cut by the Federal Reserve. At $2,425.55, spot gold prices were down 0.24%. This previous month, the price of the precious metal showed great strength, hitting a record high of $2,531.60 on August 20.
The report’s conclusions will be very important in determining how the public will anticipate the Federal Reserve’s next interest rate decision. Whether the interest rate drop at the Fed’s September meeting will be 25 basis points or 50 basis points depends largely on the labor market data for August.
According to the traders have somewhat revised their expectations the probability of a 25-basis-point cut is now 69%, while the possibility of a more substantial 50-basis-point reduction has dropped to 31%.
Major Asian markets continue to have little demand for physical gold, and new import limitations have not increased Chinese demand as was expected.
