Gold prices stable as eyes on key US data

Gold prices held steady on Wednesday, hovering near a one-week high, as investors awaited a crucial US inflation report that could shape the Federal Reserve’s rate-cut decisions, Reuters reported.

Spot gold remained unchanged at $2,357.35 per ounce, trading in a narrow range after Tuesday’s gains. The focus is squarely on the US consumer price index (CPI) data due later today, with analysts expecting a slight moderation in core inflation.

Lower inflation readings would bolster hopes for Fed rate cuts, potentially benefiting gold. However, a hotter-than-expected report could dampen those expectations and pressure gold prices.

Recent weak jobs data has fuelled market bets on rate reductions later this year. However, higher interest rates typically reduce demand for non-interest-bearing gold.

Fed Chair Powell reiterated confidence in inflation’s decline throughout 2024, suggesting rate hikes are unlikely. However, Tuesday’s producer price data surprised with a stronger-than-expected rise, raising some concerns.

Silver prices dipped slightly 0.1 per cent, while platinum and palladium advanced, 2.2 per cent and 1.3 per cent, respectively. BHP shares jumped after its takeover target announced a strategic shift to counter a recent bid.