Metal steady as softer US core inflation data lifts expectation of interest rate cuts, though news of a ceasefire caps further gains
16 January 2025 - 07:44
byRahul Paswan
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold prices were stable on Thursday after hitting their highest levels in more than a month, as softer US core inflation data lifted expectations of interest rate cuts, though news of a ceasefire accord between Israel and Hamas capped further gains.
Spot gold held its ground at $2,696.30/oz by 3.01am GMT, after hitting its highest point since December 12 earlier in the session. US gold futures gained 0.3% to $2,725.20.
“Easing underlying inflation in the US renewed hopes of a less restrictive Fed policy this year. The core inflation unexpectedly slowed, while headline consumer prices showed no significant upside surprises,” said Jigar Trivedi, senior analyst at Reliance Securities.
“That supported bullion demand as progress in disinflation could prompt the FOMC [Federal open market committee] to ease monetary policy, reducing the opportunity cost of holding nonyielding assets.”
Concerns persist over potential tariffs from US president-elect Donald Trump’s incoming administration, which could further worsen inflationary pressures.
Central bank officials said data released on Wednesday showed US inflation was continuing to ease even as they noted heightened uncertainty in the coming months, as they await a first glimpse of the incoming Trump administration’s policies.
Supporting bullion, the dollar slipped on Thursday to stand just off recent peaks as cooling US inflation data knocked down bond yields.
The prospect of more Fed rate cuts this year heightened after the data, and interest rate futures traders on Wednesday were pricing in near-even odds that the US central bank would reduce rates twice by the end of this year, with the first reduction to come in June.
Elsewhere, Israel and Hamas reached a ceasefire and hostage agreement, reducing some safety appeal of the metal, Trivedi said.
Spot silver shed 0.2% to $30.61/oz and palladium dropped 0.3% to $958.50. Platinum steadied at $938.25.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold close to one-month high
Metal steady as softer US core inflation data lifts expectation of interest rate cuts, though news of a ceasefire caps further gains
Bengaluru — Gold prices were stable on Thursday after hitting their highest levels in more than a month, as softer US core inflation data lifted expectations of interest rate cuts, though news of a ceasefire accord between Israel and Hamas capped further gains.
Spot gold held its ground at $2,696.30/oz by 3.01am GMT, after hitting its highest point since December 12 earlier in the session. US gold futures gained 0.3% to $2,725.20.
“Easing underlying inflation in the US renewed hopes of a less restrictive Fed policy this year. The core inflation unexpectedly slowed, while headline consumer prices showed no significant upside surprises,” said Jigar Trivedi, senior analyst at Reliance Securities.
“That supported bullion demand as progress in disinflation could prompt the FOMC [Federal open market committee] to ease monetary policy, reducing the opportunity cost of holding nonyielding assets.”
Concerns persist over potential tariffs from US president-elect Donald Trump’s incoming administration, which could further worsen inflationary pressures.
Central bank officials said data released on Wednesday showed US inflation was continuing to ease even as they noted heightened uncertainty in the coming months, as they await a first glimpse of the incoming Trump administration’s policies.
Supporting bullion, the dollar slipped on Thursday to stand just off recent peaks as cooling US inflation data knocked down bond yields.
The prospect of more Fed rate cuts this year heightened after the data, and interest rate futures traders on Wednesday were pricing in near-even odds that the US central bank would reduce rates twice by the end of this year, with the first reduction to come in June.
Elsewhere, Israel and Hamas reached a ceasefire and hostage agreement, reducing some safety appeal of the metal, Trivedi said.
Spot silver shed 0.2% to $30.61/oz and palladium dropped 0.3% to $958.50. Platinum steadied at $938.25.
Reuters
MARKET WRAP: JSE and rand firmer after ‘market-friendly’ US inflation data
WATCH: Stock Picks
WATCH: Market Report
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.