Gold Prices Poised for Second Weekly Gain as US Inflation Cools

1 Mar 2024 , 11:02 AM

Friday saw a steady increase in gold prices, approaching month-high levels. This came as statistics indicated that U.S. inflation was progressively declining, and traders shifted their attention to statements made by numerous Federal Reserve officials.

Spot gold was unchanged at $2,043.98 an ounce, having reached a record-breaking $2050.59 on Thursday – the highest price since February 2. US gold futures decreased by 0.1% to $2,052.40.

According to data released on Thursday, the core PCE price index increased by 0.4% in January, while the U.S. personal consumption expenditures (PCE) price index increased by 0.3%. Inflation increased by 2.4% in the year ending in January, which was the lowest increase in over three years.

U.S. central bankers are examining data that indicates pricing pressures increased last month, but they are more concerned with the overall inflation picture, which they believe will pave the way for interest rate reductions later in the year. 

On Friday, at least six other Fed officials are scheduled to speak.

According to LSEG’s interest rate probability software IRPR, traders are staking around three quarter-point (25 bps) interest rate reduction for the United States in 2024, with a 65% chance that the first one would occur in June. 

Non-yielding bullion is more appealing when interest rates are lower. 

The holdings of SPDR Gold Trust, the largest exchange-traded fund globally backed by gold, dropped 3.3% in February and 6.4% year to date. 

Impala Platinum, a producer of platinum group metals, may close some of its profitable mining sites in South Africa if metal prices continue to drop and reorganization attempts are unsuccessful in increasing profits, according to CEO Nico Muller. 

Spot platinum saw a 0.5% increase to $880.45 per ounce, palladium saw a 0.2% increase to $943.37, and silver saw a 0.1% decline to $22.64.

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