Gold prices remained elevated on Friday, approaching their peak in over a month. This movement can be attributed to a generally weaker dollar and heightened anticipations regarding a potential interest rate cut by the U.S. Federal Reserve in September, which has subsequently bolstered demand for bullion. Spot gold maintained its position at $3,413.80 per ounce, as of 0059 GMT, following its peak since July 23 on Thursday. Bullion has experienced an increase of 3.6% thus far this month. U.S. gold futures for December delivery remained unchanged at $3,473.80. The dollar experienced a decline of 0.4% overnight and is poised for a monthly decrease, which results in a lower cost of gold priced in dollars for holders of other currencies.

Fed Governor Christopher Waller on Thursday intensified his advocacy for reducing short-term U.S. borrowing costs, expressing his support for an interest-rate cut next month along with additional reductions over the subsequent three to six months. Traders are projecting an 86% probability of a 25-basis-point reduction in interest rates at the upcoming Federal Reserve policy meeting, as indicated by the CME FedWatch Tool. Non-yielding gold generally exhibits strong performance during periods characterized by low interest rates. Investors are currently anticipating the forthcoming release of the Personal Consumption Expenditures (PCE) Price Index, which is the U.S. Fed’s favored inflation metric, expected later today, to gain additional insights into the Fed’s interest rate path.

According to a survey conducted by Reuters, economists anticipate that the PCE price index will increase by 2.6% in July, consistent with the rise observed in the previous month. Meanwhile, Fed Governor Lisa Cook has initiated legal proceedings on Thursday, asserting that U.S. President Donald Trump lacks the authority to dismiss her from her position. This development may instigate a legal confrontation that could potentially contest the long-standing principles governing the autonomy of the U.S. central bank. Elsewhere, spot silver experienced a slight decline of 0.1%, settling at $39.02 per ounce, while platinum decreased by 0.2% to $1,356.69, and palladium remained unchanged at $1,102.75.