Spot gold was up by 0.5% at $2,045.59 per ounce, while U.S. gold futures saw a 0.6% increase at $2,054.40
Gold reached a one-month peak on Thursday following a decline in the dollar post U.S. inflation data meeting expectations. Traders are now awaiting further statements from Federal Reserve officials to gauge potential interest rate adjustments.
At 12:59 p.m. ET (1759 GMT), spot gold was up by 0.5% at $2,045.59 per ounce, while U.S. gold futures saw a 0.6% increase at $2,054.40. Silver climbed by 1% to $22.67 per ounce, platinum remained steady at $878.73, and palladium rose by 1.1% to $939.75.
“Gold bulls just needed an excuse to buy, and they found it,” with the data only on consensus after recent strong inflation readings, said Tai Wong, a New York-based independent metals analyst, adding gold could face technical resistance around $2,065.
The U.S. personal consumption expenditures price index indicated a 0.3% rise in January, with the core PCE price index increasing by 0.4%. This development placed pressure on the dollar, consequently making gold more affordable for investors using different currencies.
However, the Fed’s preferred gauge of inflation running at 0.4% for the month won’t bring a rate cut any closer than June, Wong added.
Despite gold being commonly viewed as a safeguard against inflation, the possibility of higher interest rates to control soaring prices deters investments in bullion, as it does not yield any interest. The CME FedWatch Tool currently suggests a 62% probability of a Fed rate reduction in June. Earlier in the week, Fed officials hinted at the likelihood of upcoming rate cuts later in the year.
The steady stream of Fed speak has noted that there’s no rush in lowering rates and that news is priced into the market, said David Meger, director of metals trading at High Ridge Futures.
