Gold prices surged over 1% on Thursday, surpassing the $2,400 per ounce mark, as data revealed a surprise decline in U.S. consumer prices, leading to expectations of interest rate cuts by the Federal Reserve. Spot gold climbed to $2,406.99 per ounce, its highest level since May 22, while U.S. gold futures rose to $2,412.60.
Pranav Mer, VP of Research at BlinkX and JM Financial, stated, “Gold continues to trade positively supported by weakness in the US Dollar and a dip in treasury yields after the Fed chairman’s comments on inflation and interest rates.”
The unexpected fall in U.S. consumer prices signals a disinflation trend, increasing the likelihood of a rate cut by the Fed. Interest-rate futures now indicate an 85% chance of a rate cut at the September meeting.
The decline in the dollar and the 10-year Treasury yield, combined with Fed Chair Jerome Powell’s comments on a potential rate cut, have made gold more attractive to investors. Spot silver also surged to $31.63 per ounce, its highest level since May 31, while platinum and palladium prices also rose.
Investors are closely watching the CPI data for further clarity on the Fed’s easing trajectory. With the possibility of a rate cut looming and geopolitical tensions escalating, the precious metals market is experiencing increased volatility. Stay tuned for more updates on how these factors will continue to impact gold prices in the coming days.
