Friday saw a little increase in gold prices, which were headed for a fourth consecutive month of gains, as investors watched a crucial U.S. inflation figure that may provide more clues about the Federal Reserve’s policy direction.
Spot gold was up 0.2% at $2,346.18 an ounce. The price of gold has increased by 0.5% this week. At $2,345.20, gold futures increased 0.1%.
Gold prices reached a record high of $2,449.89 on May 20 and have since increased by 2.7% this month.
Despite a robust labour market, Fed members anticipate lower inflation this year, so they are not in a rush to lower the policy rate from the range of 5.25% to 5.5% that they have maintained since last July.
Investors are currently expecting the Fed’s favourite inflation indicator, the personal consumption expenditures price index, which is expected to release its April reading at 1230 GMT.
According to the CME FedWatch Tool, traders’ bets indicated rising scepticism that the Fed will cut rates more than once in 2024, with a current pricing in of roughly a 64% chance of a rate decrease by November.
Although gold is seen as an inflation hedge, owning non-yielding gold has a greater opportunity cost as interest rates rise.
The massive Russian mining and metals company Nornickel reduced its prediction for this year’s worldwide nickel surplus but stated it anticipated a greater global palladium deficit.
The CEOs of both companies travelled to South Africa a few days after miner BHP announced its attempt to acquire rival Anglo American, where Anglo’s requirement to sell off its local platinum and iron ore holdings was provoking political unrest.
Spot silver dropped 0.2% to $31.11 an ounce, palladium dropped 0.2% to $946.25, and platinum dropped 0.2% to $1,022.70 an ounce.
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