Gold is on track for its fourth consecutive weekly gain, despite a downturn early on Friday as the dollar strengthened. The precious metal remains close to the $2400 mark amidst speculation that the Federal Reserve will start cutting interest rates in September.

The bullion market saw a decline for the second day due to profit-taking after gold hit a new record on Wednesday. Expectations of interest rate cuts are considered positive for gold, which tends to be a more attractive investment when rates fall.

August gold futures fell by 0.1% on Thursday, settling at $2,456.40 an ounce on Comex. The most actively traded contract gained 1.5% in the first four days of the week. In recent months, gold fell 0.3% in June after rising 1.9% in May and 2.9% in April. So far, the metal has increased by 13% in 2023.

The European Central Bank (ECB) maintained its interest rates on Thursday, but investors anticipate that it will follow the Fed in cutting rates come September.

The CME FedWatch Tool indicates that 95.3% of tracked investors believe the Fed will keep rates steady this month. However, nearly all expect rate cuts to begin in September, with the majority forecasting a 25 basis point reduction.

In June, the Fed held interest rates unchanged, keeping them between 5.25% and 5.50%, a level maintained for about a year after a 5.25 percentage point increase since March 2022 to combat inflation. Fed officials are increasingly confident that inflation is nearing their 2% target.

The Fed monitors both inflation and labor market data to guide its monetary policy. Next week’s release of the personal consumption expenditures price index for June will likely offer additional direction.

U.S. weekly initial jobless claims, reported on Thursday, showed the largest increase since early May, suggesting a cooling labor market which could pressure the Fed to cut rates.

Earlier in the week, the Fed's Beige Book report from its 12 regional banks indicated that five banks are experiencing flat or declining economic activity, three more than in the previous report, likely due to high interest rates.

Investors are also closely watching the U.S. political landscape, including former President Donald Trump’s speech at the Republican National Convention and calls from Democrats for President Joe Biden to exit the race.

September silver futures dropped 0.5% on Thursday, settling at $30.22 an ounce on Comex, with the front-month contract decreasing by 3% in the first four days of the week. Silver fell 2.9% in June after a 14% surge in May and a 7% rise in April. It has edged up 0.2% in 2023.

Spot palladium declined by 2.4% on Thursday to $980.70 an ounce, down 4.2% for the week. Palladium rallied 8.1% last month after declines of 5.1% in May and 5.9% in April, and plummeted 38% last year.

Spot platinum decreased by 2.2% on Thursday to $980.70 an ounce, down 2.5% for the week. Platinum fell 3.7% last month after gains of 10% in May and 3.1% in April. It has dropped 6.8% in 2023.

Disclaimer: This editorial has been prepared by Champion Rarities for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or a recommendation regarding any particular security, commodity, or course of action. Opinions expressed herein cannot be attributable to Champion Rarities. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities, or other financial instruments