IGI Logo

Gold prices edged higher on Thursday, with traders focusing on the upcoming U.S. economic data that may offer further insights into an expected reduction in the Federal Reserve's interest rate next week.

Spot gold was up 0.2% at $2,515.59 per ounce, as of 0353 GMT. U.S. gold futures were steady at $2,543.40.

"Gold will likely break above $2,532. Only strong macroeconomic data, particularly from the U.S., indicating significant growth or economic improvement, could stop its upward trend," said Kelvin Wong, OANDA's senior market analyst for Asia Pacific.

Traders will focus on the U.S. Producer Price Index and initial jobless claims print, scheduled for release at 1230 GMT, as well as consumer sentiment data coming out on Friday.

Headline PPI month-over-month is expected at 0.1%, while the year-over-year read is expected at 1.8%. This compares to prints of last month's 0.1% and 2.2%, respectively.

Data on Wednesday showed that U.S. consumer prices rose marginally in August, but underlying inflation showed some stickiness, which could discourage the Federal Reserve from delivering a half-point interest rate cut next week.

CPI data showed no major inflation spikes, which is supporting gold prices to hold above $2,500 and suggesting no immediate changes to Fed policy, Wong added.

U.S. central bankers will likely start long-awaited interest rate cuts next week with a quarter-of-a-percentage-point reduction, as they seek to reduce the odds of a recession even as stubbornly intact underlying price pressures put them off more aggressive action.

Zero-yield bullion tends to be a preferred investment amid lower interest rates and geopolitical turmoil.

Spot silver was flat at $28.68 per ounce and platinum gained 0.9% to $959.95.

Palladium climbed 1.3% to $1,021.84, its highest since July 8, following comments on export regulations from Russian President Vladimir Putin.

Putin said on Wednesday that Moscow should consider limiting exports of uranium, titanium and nickel in retaliation against the West.