Gold Prices Ease as Investors Eye Key US Inflation Report

12 Mar 2024 , 10:22 AM

Tuesday’s gold prices remained stable as investors held off on initiating new positions following bullion’s record run ahead of U.S. consumer price data that may provide hints about the Federal Reserve’s future course for its monetary policy.

Spot gold was unchanged at $2,182.48 an ounce, following nine sessions of increases. On Friday, gold reached a record high of $2,194.99.

At $2,188.70, US gold futures were likewise unchanged.

On Tuesday, the dollar remained relatively stable, but the yen strengthened close to a one-month high due to growing speculation that the Bank of Japan may remove negative interest rates as soon as next week.

The February U.S. consumer price index (CPI) report is scheduled to be released at 12:30 GMT. It is anticipated to increase by 0.4% for the month and maintain the 3.1% annual growth rate. Core inflation is predicted to increase by 0.3%, which will cause the annual pace to drop to 3.7%—its lowest level since early 2021.

This week’s other U.S. economic data includes the weekly initial jobless claims print on Thursday, retail sales, and the producer price index.

The U.S. labour market appeared to be cooling, according to data released last week, and Fed Chair Powell stated that the Fed is getting close to having the confidence necessary to lower interest rates due to declining inflation.

According to LSEG’s interest rate likelihood software, traders are pricing in three to four quarter-point (25 bps) U.S. rate decreases, with a 70% chance for the first in June.

Lower rates increase the allure of bullion that never yields.

Spot silver increased 0.3% to $24.49, palladium increased 0.3% to $1,033.35, and spot platinum increased 0.5% to $937.60 per ounce.

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