Gold Edges Higher as Traders Weigh Inflation Data, Ukraine War
Gold edged higher as investors assess Russia’s threats of ballistic missile strikes on the Ukrainian capital and the outlook for US interest rates.
Bullion climbed 0.2% to $2,641.54 an ounce as of 12:44 p.m. in New York.
Russian President Vladimir Putin warned on Thursday that Russian forces could strike “decision-making centers” in Kyiv with new ballistic missiles, threatening to further escalate the war in Ukraine. Geopolitical tensions boost gold’s appeal as a haven asset. Still, the bullion market has been relatively calm since Monday’s 3.4% slump, which came on news that Israel and Lebanese militant group Hezbollah were preparing a 60-day suspension of hostilities.
Meanwhile, investors are digesting the next moves by the Federal Reserve and its impact on gold. The case for a December interest-rate cut was bolstered by Wednesday’s US core personal consumption expenditures price index, the Fed’s preferred measure of underlying inflation, which increased in line with expectations. Traders are now pricing in a two-thirds chance of a quarter-point cut next month, up from about even odds earlier this week. Lower borrowing costs typically benefit gold, as it doesn’t pay interest.
Pressure on gold prices eased this week as a dollar rally sparked by President-elect Donald Trump’s re-election lost steam. A stronger dollar makes the precious metal more expensive for many buyers. The Bloomberg Dollar Spot Index was little changed. Silver, platinum and palladium rose.
Source: Bloomberg
