U.S. PCE data boosts gold prices, heightening rate reduction anticipations

In the financial world, August 2020 saw a significant rise in the prices of gold and silver, with the data on these increases not specifically attributed to a single entity. Typically, such data would be published by the U.S. Mint or financial institutions such as the Federal Reserve. However, the search results focused primarily on gold price developments and general market conditions, without naming the exact publisher of those issuance figures.

The rise in gold prices was particularly noteworthy, as the Front Month Comex Gold for September delivery jumped by $41.90 (or 1.22%) to $3,473.70 per troy ounce, reaching a record high on Friday. Silver prices also followed this trend, with Front Month Comex Silver for September delivery surging by $1.01 (or 2.58%) to $40.200 per troy ounce.

Gold, being a non-yielding asset and a dollar-denominated commodity, tends to perform well in a low-interest environment. This trend was further supported by the markets' anticipation of a lowering of lending rates by the US Fed when the policymakers convene next month.

The increase in gold and silver prices was not a one-time occurrence, as both metals saw a rise for two consecutive weeks. This upward trend was reflected in their monthly performance as well, with gold gaining $180.50 (or 5.48%) per troy ounce and silver gaining $3.6480 (or 9.98%) per troy ounce for the month of August.

The rise in gold and silver prices comes at a time when the US economy is showing signs of recovery. In July, US personal income rose by 0.4% month-over-month to $25.905 trillion, and US personal/consumer spending increased by 0.5% from June to $20.802 trillion. However, the core PCE price index (excluding volatile and energy prices) went up 0.3% from the previous month and rose by 2.9% year-over-year, indicating a steady increase in inflation.

The August jobs and inflation data, which are set to be released in early September, will be crucial for the next Fed meeting. According to the CME Group's FedWatch Tool, markets see an 87.2% chance of a 25-basis-point rate cut at the September 17 Fed meeting, which could further drive the prices of gold and silver.

It is important to note that the Central Bank balance sheet in the US decreased to $6,603,384 million in the week ended August 27. This decrease may suggest a tightening of monetary policy, which could potentially impact the prices of gold and silver.

In conclusion, the prices of gold and silver have been on a steady rise in August, driven by a low-interest environment and anticipation of a rate cut by the US Fed. The upcoming August jobs and inflation data will be crucial in determining the future direction of these prices.