Gold prices rise in early trade

11 May 2023 , 08:42 AM

In the early Asian hours of Thursday, gold prices increased somewhat due to a weaker dollar.

Spot gold increased 0.2% to $2,032.48 per ounce. At $2,039.00, U.S. gold futures were up 0.1%.

The dollar index declined by 0.1%, lowering the cost of greenback-priced bullion for international buyers.

For the first time in two years, the annual increase in U.S. consumer prices dropped to below 5% in April, possibly giving the central bank justification to hold off on raising interest rates further next month.

Following the announcement of U.S. inflation data on Wednesday, the price of gold initially increased before falling as a result of profit-taking.

The probability that the U.S. central bank will maintain rates at their current level in June is now seen by the markets at 99%.

Decreasing interest rates increase demand for non-yielding bullion

On Wednesday, U.S. President Joe Biden increased the pressure on Republican lawmakers to act swiftly to raise the nation’s $31.4 trillion debt ceiling or risk sending the largest economy in the world into a recession.

Later in the day, the Bank of England is anticipated to increase borrowing costs for the 12th consecutive meeting.

Spot silver prices dropped by 0.1% to $25.39 per ounce, platinum prices fell by 0.1% to $1,113.38, and palladium prices dropped by 0.3% to $1,602.55.

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