Mumbai, 16 May (Commoditiescontrol): Gold prices saw a modest rise on Thursday, lifted by a weakening U.S. dollar and a drop in Treasury yields following data that suggested a cooling in U.S. inflation, increasing the likelihood of an interest rate cut by the Federal Reserve. Spot gold rose by 0.3% to $2,393.21 per ounce after a 1% gain on Wednesday, and U.S. gold futures were slightly up by 0.1% at $2,397.60.
The U.S. dollar declined by 0.2% against a basket of major currencies, enhancing the appeal of gold for investors using other currencies. Concurrently, benchmark 10-year Treasury yields reached their lowest point in over a month.
Inflation data showed a U.S. CPI increase of 0.3% last month, down from 0.4% in the preceding two months, indicating a downward trend at the second quarter's onset. This development supports financial market predictions of a Fed rate cut in September.
Statements from Federal Reserve officials and recent government reports suggest optimism that inflation pressures are easing, which could reduce the need for higher interest rates—making non-yielding gold more attractive.
Tensions in U.S.-China trade relations and their potential inflationary impacts continue to be a concern, although they do not necessarily prompt a stricter policy response from the Fed. Meanwhile, a report revealed India’s trade deficit widened in April due to decreased exports and a significant rise in gold imports.
In other precious metals markets, spot silver remained steady at $29.71 per ounce, while platinum increased by 0.5% to $1,069.45 and palladium rose by 0.3% to $1,012.84. The global stock markets are experiencing a surge, driven by renewed optimism that the U.S. Federal Reserve will commence rate cuts in September. That raises investment appeal for non yielding assets such as gold.
(By Commoditiescontrol Bureau: 09820130172)
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