Gold advanced on Friday as U.S. inflation figures were in line with forecasts, supporting wagers the Federal Reserve would keep cutting interest rates later in the year.
Spot gold climbed 0.8 percent to $3,777.79 an ounce at 11:04 a.m. EDT (1504 GMT), having touched a record $3,790.82 earlier in the week. The metal has increased around 2.5 percent this week.
“Monthly PCE readings are in line, but personal income and spending were a tenth higher than forecast. Nothing in this data will deter the Fed from continuing with another judicious rate cut at the October meeting,” opined Tai Wong, a lone metals trader.
Figures indicated U.S. Personal Consumption Expenditures (PCE) price index increased 2.7 percent year-over-year during August, as per economists’ forecast in a Reuters poll.
Investors now have an 88 percent chance of a rate cut in October and a 65 percent chance of a further one in December, based on the CME FedWatch Tool, opens new tab.
Markets will also be monitoring comments from Richmond Fed President Thomas Barkin and Fed Vice Chair Michelle Bowman later today for hints on the Fed’s thinking.
Gold, the classic safe haven, usually appreciates when interest rates fall.
Also Read: Gold strikes new all-time high
In the trade arena, President Donald Trump imposed a new round of tariffs on foreign drugs, trucks and furniture, which are effective October 1.
Spot silver other than among other metals increased 1.2 percent to $45.76 an ounce, reaching over 14-year high, while palladium increased 1.7 percent to $1,271.46, set to register a weekly gain.
Platinum rose 2.7 percent to $1,570.45, its highest in more than 12 years.
Gold holds firm as inflation reports maintain Fed rate cut speculations alive
Analysts and traders note that silver and platinum are gaining momentum amid elevated gold prices, with investors turning to more affordable alternatives.
“Chinese President Xi’s pledge to cut net Chinese carbon emissions by 7-10 percent by 2035 has also spurred buying of silver which is used in solar cells,” Wong said.
He added that sentiment was also boosted by Freeport’s force majeure at the Grasberg copper mine.
