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HomeLatestGold Prices Inch Up on Weak US Data; Await PCE Inflation Figures
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Gold Prices Inch Up on Weak US Data; Await PCE Inflation Figures

In Asian trading on Friday, gold prices experienced a modest rise as indications of a cooling U.S. economy spurred some demand for the precious metal. However, gains were tempered as investors awaited key inflation data for further cues on potential rate cuts.

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Spot gold edged up by 0.2% to $2,335.86 per ounce, while gold futures expiring in June also increased by 0.2% to $2,335.68 per ounce by 01:00 ET (05:00 GMT).

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The yellow metal had faced significant losses over the week after retreating from near record highs seen over the past five sessions. This decline came as expectations for early U.S. interest rate cuts were largely priced out by traders.

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While the dollar weakened following softer-than-expected gross domestic product (GDP) data, providing some relief for bullion prices, this relief was limited due to a stronger GDP price index, which further reduced expectations of imminent interest rate cuts by the Federal Reserve.

Spot prices were on track to register a 2% loss for the week, extending the decline from record highs reached earlier in April, around $2,430 per ounce. Contributing to this downward pressure was the diminished risk premium over unrest in the Middle East, particularly as tensions between Iran and Israel failed to escalate into conflict.

Another significant factor in gold’s losses was the diminishing belief among traders that the Fed would cut interest rates soon. Traders, according to the CME Fedwatch tool, now anticipate rate cuts to commence by September or the fourth quarter.

Attention now turns to the upcoming Personal Consumption Expenditures (PCE) price index data, which serves as the Fed’s preferred inflation gauge and is expected to influence the central bank’s outlook. Higher interest rates for an extended period typically spell challenges for gold, as they increase the opportunity cost of holding the metal.

In the realm of other precious metals, platinum futures rose by 0.6% to $931.25 per ounce, while silver futures saw a 0.9% increase to $27.60 per ounce. Meanwhile, copper prices rebounded to two-year highs, with three-month copper futures on the London Metal Exchange climbing by 0.8% to $9,983.50 a ton, amid reports of potential consolidation in the copper mining sector.

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