Gold steadied after surging beyond $2 400/oz in the previous session, as cooler-than-expected US inflation boosted bets the Federal Reserve will start cutting rates soon.
The precious metal jumped 1.9% on Thursday, the biggest gain since March, after the US reported the slowest growth in core consumer prices — which exclude energy and food — since 2021.
The data prompted traders to fully price in a September rate cut for the first time in months, with at least two quarter-point moves now expected in 2024. Lower borrowing costs typically benefit bullion, which doesn’t pay interest.
Gold, now closing in on an all-time high of $2 450.07 reached in May, has rallied 17% this year despite headwinds including high interest rates and sticky inflation. Strong buying by central banks, haven demand amid geopolitical tensions and purchases by Chinese consumers have all acted as supports for bullion.
With markets now viewing the prospect of a September Fed pivot as highly likely, investors were keen to boost their exposure to gold, ANZ Group Holdings analysts Brian Martin and Daniel Hynes said in a note.
Gold was 0.1% lower to $2 412.47 as of 8:53 a.m. in Singapore. The Bloomberg Dollar Spot Index was little changed after sinking 0.5% in the previous session. Silver slipped, following a 2.1% gain on Thursday. Palladium fell and platinum was steady.