Gold Steady Gains After U.S. Inflation Data
Gold held a two-day gain, after a surprise slowdown in U.S. inflation revived expectations for a Federal Reserve interest rate cut this year.
Bullion traded around $2,695 an ounce near its highest in a month after the consumer price index, which excludes food and energy costs, rose 0.2% after four months of 0.3% gains. That suggests U.S. officials may have room to ease policy sooner than previously thought.
Treasury yields and the dollar fell after the release, boosting bullion’s appeal because it bears no interest and becomes cheaper for most buyers when the U.S. dollar weakens. Swap traders are now fully pricing in a July rate cut again a reversal after strong jobs data on Friday saw markets push back expectations for easing to September or October.
A number of Fed officials on Wednesday expressed confidence that price pressures would continue to ease, but some cautioned that the battle against inflation was not over. Monetary policy easing was a major catalyst for the precious metal’s rally to a record last year.
Spot gold was little changed at $2,695.06 an ounce at 7:51 a.m. in Singapore, after rising 0.7% in the previous session. The Bloomberg Dollar Spot Index was steady. Silver held onto a 2.5% gain on Wednesday, while platinum and palladium were flat.
Source: Bloomberg
