WASHINGTON (dpa-AFX) - Gold prices declined on Thursday after hitting a two-week high on rate cut optimism. Spot gold dipped 0.6 percent to $2,432.70 per ounce while U.S. gold futures were up 0.1 percent at $2,476.05.
The dollar steadied in early European trade, after having fallen to a near two-week low as Federal Reserve Chair Jerome Powell indicated a possible interest rate cut in September.
After keeping the key interest rate unchanged at a 23-year high, Powell indicated on Wednesday that recent progress on inflation and cooling in the labor market could put the September rate cut on the table.
The Fed's next monetary policy meeting is scheduled for September 17-18, when investors widely expected the Fed to begin lowering interest rates. Almost three cuts are priced in by the year-end.
In economic releases, U.S. reports on weekly jobless claims, labor productivity and costs, manufacturing activity and construction spending may attract investor attention in the New York session ahead of the all-important non-farm payrolls data for July due Friday.
Meanwhile, the Bank of England announces its rate decision later today and markets are split on whether the central bank will deliver its first rate cut since the pandemic later in the day following some recent upside surprises in services inflation.
On the geopolitical front, media reports suggest that Iran is considering a retaliatory strike on Israel for killing a Hamas leader on its soil.
It was reported that Iran's supreme leader, Ayatollah Ali Khamenei, has issued an order for Iran to strike Israel directly, in retaliation for the killing in Tehran of Hamas's leader, Ismail Haniyeh.
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