Gold Steady, US CPI Heating Pressure on Cut Prospects
Gold prices tended to stabilize after US data showed inflation accelerating again, reducing the chances of the Federal Reserve cutting interest rates this year. Bullion traded around US$4,718 per ounce, after falling 0.4% on Tuesday.
The US consumer price index in April recorded its fastest increase since 2023. After adjusting for inflation, real wages reportedly fell for the first time in three years, adding to market caution regarding the disinflationary path.
Rising energy prices have also pushed up bond yields, with the market assessing the risk of inflation remaining at levels that could force the Fed to keep interest rates higher for longer, even opening up the possibility of a rate hike next year. A high interest rate environment is generally a drag on gold because the precious metal does not provide a yield.
On the domestic policy front, President Donald Trump unveiled new proposals this week to suppress prices, targeting beef and gasoline amid surging consumer prices that could become politically damaging for his party in Congress. Meanwhile, the Bloomberg Dollar Spot Index rose 0.1%, also limiting gold's upside.
At 6:53 a.m. Singapore time, spot gold was recorded at US$4,718.19 per ounce. Silver rose 0.4% to US$86.84 and is said to have gained nearly 18% throughout May, while platinum and palladium remained relatively stable. The market's next focus will be on the direction of core inflation, yield movements, and the Fed's signal regarding how long interest rates need to remain tight. (gn)*
Source: Newsmaker.id
