Gold ticks up after cooler-than-expected US inflation data
Gold prices rose on Wednesday, helped by cooler-than-expected U.S. inflation numbers, strengthening investor expectations that the Federal Reserve would start cutting interest rates by September.
Spot gold was up 0.1% at $3,324.72 an ounce as of 13:55 ET (1755 GMT), after rising as much as 1% earlier in the session.
U.S. gold futures settled largely unchanged at $3,343.7.
Data showed the Consumer Price Index increased 0.1% last month after rising 0.2% in April. Economists polled by Reuters had forecast CPI climbing 0.2% and increasing 2.5% year-on-year.
"The surprise low print in core CPI has goosed the entire precious metals complex higher as yields and the dollar fall. The hope is that it will bring a Fed cut that much sooner," said Tai Wong, an independent metals trader.
Traders are currently pricing in a 68% chance of an interest-rate cut by the U.S. central bank in September, according to the CME FedWatch tool.
On the trade front, U.S. President Donald Trump, opens new tab said a deal with China was done, with Beijing supplying magnets and rare earth minerals, while Washington would allow Chinese students at its colleges and universities.
The market's focus is now on the U.S. Producer Price Index data, due on Thursday, before the Fed's June 17-18 meeting.
"The market will want to see gold and silver take out recent highs, $3,403 and $36.90 respectively, as a signal to charge higher. If we don't rally strongly on surprisingly good data, then it may signal a short-term correction," Wong said.
Platinum rose 2.9% to $1,256.70, hitting its highest level since 2021 earlier in the day.
While speculative and ETF demand has fueled platinum's rally, a sustained breakout is unlikely due to price-sensitive Chinese demand, downside pressure on auto sector demand and an expected increase in global supply, Goldman Sachs said in a note.
Spot silver eased 1.2% to $36.11 per ounce, while palladium added 1.3% to $1,074.25.
Source: Reuters
