Gold prices surge amid cautious investor sentiment ahead of key US inflation data
Date
5/28/2024 4:54:15 AM
(MENAFN) Gold prices experienced a modest rise during early Tuesday trading, even as investors maintained a cautious stance in anticipation of critical US inflation data, which could provide further insights into the Federal Reserve's future policy decisions. By 0320 GMT, spot gold prices had increased by 0.1 percent to USD2,353 per ounce, following a 1 percent rise in the previous session. Similarly, US gold futures saw a more significant uptick, climbing 0.8 percent to USD2,354 per ounce.
The market's attention is now focused on the upcoming release of the core personal consumption expenditures (PCE) price index report for April, scheduled for Friday. This report is highly significant as it serves as the Federal Reserve's preferred gauge of inflation. The data is expected to offer crucial clues regarding the central bank's approach to interest rates.
Current trading patterns suggest that investors are betting on multiple interest rate cuts by the US central bank in 2024. According to CME's Fed Watch service, there is approximately a 63 percent probability that the Federal Reserve will lower interest rates by November. Gold, traditionally viewed as a hedge against inflation, benefits from such expectations. However, higher interest rates typically increase the opportunity cost of holding non-yielding assets like gold.
In the realm of other precious metals, silver saw a 0.4 percent rise in spot transactions, reaching USD31.81 per ounce. Platinum also edged higher by 0.2 percent to USD1,056.15 per ounce, while palladium increased by 0.4 percent, hitting USD992.50 per ounce. These movements reflect broader market dynamics as investors navigate the interplay between inflation expectations and monetary policy signals.
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