Gold Edges Closer to Record as Traders Brace for Inflation Data
Gold is heading for a weekly gain streak that pushes it closer to a record high, as investors prepare for the release of inflation data that could be key to US monetary easing this year.
Bullion held steady early Friday in Asia around $3,415 an ounce, after Thursday's data showed the US economy grew faster than expected. The figures raised inflation concerns ahead of Friday's release of US personal consumption spending, which is expected to rise. This could limit the Federal Reserve's ability to cut interest rates—a scenario that typically presents a headwind for gold, as it does not pay interest.
Market participants also weighed comments Thursday from Fed Chairman Christopher Waller—a key candidate to replace Jerome Powell as Fed Chair next year—who said he would support a quarter-point cut in September and predicted additional cuts in the next three to six months.
The swaps market is pricing in about an 85% chance of a rate cut next month, although beyond September there is high uncertainty about how inflation and the US labor market will develop as the impact of President Donald Trump's tariffs ripples through the economy.
Growing concerns over threats to the Fed's independence have also benefited the precious metal, after Trump moved this week to remove Fed Chair Lisa Cook.
So far this week, gold has risen 1.3%, edging closer to its all-time high of around $3,500 an ounce set in April. Trade and geopolitical friction, inflows into exchange-traded funds (ETFs), and central banks' moves to diversify away from the US dollar have also supported gold's safe-haven status this year.
Spot gold was barely changed at $3,415.73 an ounce at 8:21 a.m. in Singapore, after rising 0.6% on Thursday. The Bloomberg Dollar Spot Index was flat, after falling 0.3% in the previous session. Silver was steady, while platinum and palladium weakened slightly.
Source: Newsmaker.id
