PT Rifan Financindo Berjangka – Gold Steady Ahead of Inflation Data for Fed Clues
Gold held gains ahead of a key U.S. inflation report that could offer further clues on the Federal Reserve’s monetary easing path, as traders assessed mixed economic data.
Bullion traded near $2,675 an ounce, after rising 0.5% in the previous session when a report showed the producer price index unexpectedly cooled in December. However, some of its components that also feed into the Fed’s preferred inflation gauge — the personal consumption expenditures deflator due later this month — were actually mixed last month.
Traders are shifting focus to the consumer price index report due later Wednesday. Expectations for rising price pressures have risen in recent weeks as the incoming Trump administration has threatened higher tariffs on imported goods. Higher borrowing costs tend to make bullion less attractive, since it doesn’t pay interest.
Still, gold is likely to hit a new record high in the second half, according to UBS Group AG. The bank expects bullion prices to reach $2,850 by year-end as a hedge against uncertainty over Trump’s presidency and equity market volatility. Silver is also expected to rise in 2025, according to UBS, which forecasts a price of $38 an ounce by year-end, partly due to stronger manufacturing demand.
Spot gold was little changed at $2,674.50 an ounce at 8:21 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady. Silver fell 0.3% to $29,829 an ounce, while platinum and palladium were little changed.
Source: Bloomberg
Gold Edges Up on Soft Inflation Print, US CPI in Focus
Gold prices extended gains on Tuesday after U.S. inflation data came in slightly weaker than expected, giving investors faint hope that the Federal Reserve would continue on its rate-easing path this year, sending the dollar lower.
Spot gold gained 0.3% to $2,671.27 per ounce as of 01:50 p.m. ET (1850 GMT). U.S. gold futures settled 0.1% higher at $2,682.30.
Data showed Producer Price Index (PPI) rose 3.3% on an annual basis in December, versus the 3.4% rise expected by economists polled by Reuters.
“The cooler PPI data stumped the U.S. dollar index and that helped out the precious metals market bulls, as lower inflation means the Fed may be able to lower interest rates sooner,” said Jim Wyckoff, a senior market analyst at Kitco Metals.
The dollar index (.DXY), opens new tab fell 0.6%, making gold cheaper for overseas buyers.
Investors now await the Consumer Price Index (CPI) on Wednesday to analyze the Fed’s policy path. A Reuters poll forecast an annual rise of 2.9%, versus November’s 2.7%, and a monthly increase of 0.3%.
“We’re going to need to see continued progress on inflation in order to bring back those interest rate cut expectations,” said Phillip Streible, chief market strategist at Blue Line Futures.
Traders currently see the Fed delivering 29.4 basis points worth of rate cuts by year-end, data compiled by LSEG shows.
Bullion is considered a hedge against inflation, but higher rates dull the appeal of the non-yielding asset. PT Rifan Financindo Berjangka.
Source : Reuters