Gold Advances on Fed Rate-Cut Bets and Middle East Tensions
Gold rose after another soft inflation report bolstered bets that the Federal Reserve may need to cut interest rates later this year.
US producer price inflation remained muted in May across the board, another sign that tariffs have yet to result in higher prices for consumers and businesses. Meanwhile, a jobs report showed recurring applications for US unemployment benefits rose to the highest since the end of 2021, adding to evidence that it is taking unemployed Americans longer to find a new job.
Treasury yields and the dollar pushed lower after the prints, lifting bullion by as much as 1.1% before paring some of the gains. Traders boosted their bets on rate cuts by the US central bank later this year. Gold typically benefits in a lower-rate environment.
Gold earlier was supported by haven demand following a CBS report that Israel was ready to launch an operation aimed at Iran, prompting the US to move some embassy staff out of Iraq and allowing military families to leave the region.
Meanwhile, Iran said it would establish a new uranium-enrichment center in response to a decision by the United Nations atomic watchdog to censure the Islamic Republic over its nuclear program, deepening the crisis that’s drawn in the US and Israel.
Separately, Trump said he intended to set unilateral tariff rates with trading partners in the next week or two, ahead of a July 9 deadline to reimpose higher duties on dozens of economies. The president also said a trade framework with China has been completed, with levies between the two largest economies to be maintained at their current levels.
Uncertainties over global trade and heightened geopolitical risks have rattled markets this year, boosting gold’s allure as a safe haven and powering a year-to-date advance of 29%.
Spot gold was up 0.8% to $3,382.06 as of 9:32 a.m. in New York. The Bloomberg Dollar Spot Index extended losses to fall 0.6%. Silver and palladium fell, while platinum rose.
Source : Bloomberg
