Gold prices saw a modest increase on Friday, with spot gold climbing 0.3% to $2,339.32 per ounce by 0640 GMT, and U.S. gold futures also rising 0.4% to $2,351.20. This slight uptick comes as markets anticipate the release of key U.S. inflation data.
Despite Friday’s increase, gold is poised for its first weekly fall in six weeks, with a 2.3% drop. This marks the most substantial weekly decrease since the beginning of December. The easing of concerns regarding a major escalation in the Middle East crisis has contributed to this weekly decline. Gold prices have receded nearly $100 from the all-time high of $2,431.29 reached on April 12.
Gold prices experienced a notable drop earlier in the week and have since remained relatively stable. While gold prices are typically influenced by factors such as yields and the U.S. dollar, the current market appears to be insulated by China’s reserve accumulation.
Recent data indicated that the U.S. economy grew more slowly than expected in the first quarter, yet an uptick in inflation echoes the sentiment of Federal Reserve members, suggesting the central bank is not in a rush to cut interest rates. Higher interest rates traditionally diminish the attractiveness of non-yielding assets like gold.
Attention is now shifting to the core Personal Consumption Expenditures (PCE) index for March, due later on Friday, which is the Fed’s preferred inflation gauge. According to IG market strategist Yeap Jun Rong, an acceleration in the PCE figures could temper expectations for multiple rate cuts by the Fed within the year.
In the metals market, spot silver experienced a 0.7% increase to $27.61 per ounce, while spot platinum rose by 1.2% to $925.40. Palladium also saw a gain of 1.5% to $988.63. Despite these increases, all three metals were on a trajectory for a weekly decline.
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