Gold trims gains on US inflation data, finds support in softer dollar
Gold rose on Wednesday, rebounding from an over one-week low hit in the previous session, on a weaker dollar, but trimmed earlier gains after data showed stalled inflation progress, hinting that the U.S. Federal Reserve might be cautious on further rate cuts.
Spot gold was up 0.3% at $2,638.90 per ounce, as of 01:41 p.m. ET (1841 GMT). U.S. gold futures settled 0.7% higher at $2,639.90.
U.S. markets to be closed on Thursday in observance of the Thanksgiving holiday.
U.S. consumer spending increased solidly in October, but progress lowering inflation appears to have stalled in the past months.
The dollar index (.DXY), opens new tab slipped 0.8%, hitting a two-week low, boosting gold's appeal for holders of other currencies.
Gold could reach $3,000 into the first two quarters of 2025, barring a sharp inflation spike that forces the Fed to raise rates, which could hurt the bull market, Streible said.
Markets now see a 70% chance of a quarter-point rate cut in December. The non-yielding bullion tends to shine in a lower-interest-rate environment.
Before the release of the PCE figures, bullion climbed up to 1%. The rebound followed a dramatic $100 plunge on Monday, marking gold's sharpest one-day drop in over five months, as safe-haven demand waned following the announcement of a long-negotiated ceasefire between Israel and Lebanon's Iran-backed Hezbollah.
Prices fell to their lowest level since Nov. 18 in the previous session.
Source: Reuters
