Gold Steady Ahead of Inflation Data for Fed Clues
Gold held gains ahead of a key U.S. inflation report that could offer further clues on the Federal Reserve’s monetary easing path, as traders assessed mixed economic data.
Bullion traded near $2,675 an ounce, after rising 0.5% in the previous session when a report showed the producer price index unexpectedly cooled in December. However, some of its components that also feed into the Fed’s preferred inflation gauge — the personal consumption expenditures deflator due later this month — were actually mixed last month.
Traders are shifting focus to the consumer price index report due later Wednesday. Expectations for rising price pressures have risen in recent weeks as the incoming Trump administration has threatened higher tariffs on imported goods. Higher borrowing costs tend to make bullion less attractive, since it doesn’t pay interest.
Still, gold is likely to hit a new record high in the second half, according to UBS Group AG. The bank expects bullion prices to reach $2,850 by year-end as a hedge against uncertainty over Trump’s presidency and equity market volatility. Silver is also expected to rise in 2025, according to UBS, which forecasts a price of $38 an ounce by year-end, partly due to stronger manufacturing demand.
Spot gold was little changed at $2,674.50 an ounce at 8:21 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady. Silver fell 0.3% to $29,829 an ounce, while platinum and palladium were little changed.
Source: Bloomberg
