Gold Inches Higher As Top Fed Official Backs July Rate Cut

WASHINGTON (dpa-AFX) - Gold prices edged higher on Friday while the dollar index pulled back slightly after Federal Reserve Governor Christopher Waller said policymakers should cut interest rates this month to counter rising growth and job market risks.

Spot gold rose 0.4 percent to $3,352.17 per ounce in European trade, but was set for a weekly loss after the release of strong U.S. economic data and amid easing concerns about the U.S. Federal Reserve's independence. U.S. gold futures for August delivery were up 0.4 percent at $3,357.90.

In remarks prepared for a gathering of Money Marketeers of New York University on Thursday, Waller stated that the Fed needed to bring its policy into neutral territory, instead of keeping it restrictive.

'I see the hard and soft data on economic activity and the labor market as consistent. It makes sense to cut the FOMC's policy rate by 25 basis points two weeks from now,' Waller said.

Separately, Fed Bank of San Francisco President Mary Daly reiterated that it's reasonable to expect two interest rate cuts before the end of the year.

However, Fed Governor Adriana Kugler said it's appropriate to keep rates steady 'for some time,' as tariffs start to boost prices.

Meanwhile, Federal Reserve Chair Jerome Powell refuted allegations of mismanagement in the Federal Reserve Board's renovation project amid growing speculation that the Trump administration may seek to remove him.

In a letter sent to White House Budget Director Russ Vought, Powell said 'we take seriously the responsibility to be good stewards of public resources.'

Representative Anna Paulina Luna, who leads a House task force on declassifying federal secrets, said she is 'criminally referring' the Fed chair to the Justice Department to investigate 'perjury.' Such referrals by lawmakers are not legally binding.

Trading later in the day may be impacted by reaction to U.S. reports on new residential construction, consumer sentiment and inflation expectations.

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