Gold inches up on expectations for Fed rate cuts

Gold prices edged up on Thursday following US consumer inflation data eased concerns about rising prices, boosting expectations of interest rate cuts from the Federal Reserve, Reuters reported.

Spot gold climbed 0.2 per cent to $2,391.78 per ounce, nearing a three-week high set on Wednesday. A weaker US dollar, driven by a decline in the Dollar Index (DXY), played a key role in gold’s rise.

This makes dollar-denominated gold cheaper for investors holding other currencies. The benchmark 10-year Treasury yield also dipped to its lowest level in over a month, further aiding gold’s appeal.

Tim Waterer, chief market analyst at KCM Trade, believes that gold is benefiting from moderating inflation. He predicts a potential rise above $2,400 in the near future.

However, Waterer cautioned that a potential rebound in the dollar or Treasury yields could pose a challenge for gold prices in the coming days.

Elsewhere in the metals market, spot silver dipped slightly 0.4 per cent, while platinum reached its highest point to $1,068.67 since May 2023, driven by its increasing use in car emission control systems.