Gold (XAU/USD) prices eased slightly on Wednesday morning as investors digested disappointing U.S. economic data and news of President Donald Trump’s potential Fed board appointment.
Spot gold was trading at $3,366.12 an ounce by 10:00 GMT, holding steady after another strong jump on Monday.
The recent rally has been supported by growing expectations of an early Federal Reserve interest rate cut, potentially as soon as next month, amid signs that the Trump administration’s unpredictable trade policies are starting to weigh on the U.S. economy.
On Tuesday, the Institute for Supply Management’s purchasing managers’ index dropped to 50.1 in July, below forecasts of 51.5, signalling a near-stall in services activity and amplifying worries over slowing economic growth.
This came after Friday’s weak payroll report, which showed fewer new jobs added and pushed the unemployment rate up to 4.2%.
Markets currently price in close to a 90% chance of a Fed rate cut in September, which supports gold as lower rates reduce the opportunity cost of holding non-yielding bullion.
Meanwhile, investors are also monitoring President Trump’s plans to fill a vacancy on the Federal Reserve board, with Governor Adriana Kugler expected to resign on August 8.