After US economic data showed a slowing in inflation, gold prices continued to rise on Friday, helped by a weaker dollar and Treasury yields. However, the Federal Reserve’s aggressive interest rate outlook kept bullion on course for a weekly loss.
As of 9:42 a.m. ET (1442 GMT), spot gold was up 0.8% at $2,614.67 an ounce, while US gold futures were up 1% at $2,633.20.
Gold became more affordable for foreign buyers when the currency dropped 0.4% from its two-year peak, and Treasury yields slightly decreased from a peak above six months.
According to the data, monthly inflation slowed in November after no improvement in the preceding months. Following an unrevised 0.2% advance in October, the personal consumption expenditures (PCE) price index increased by 0.1% last month.
“The personal income, personal spending, and PCE figures all showed lower-than-expected results. Phillip Streible, chief market strategist at Blue Line Futures, stated, “We’re seeing people re-establish positions and return to the gold market here.”
“It’s still far too early to tell, but after two interest rate cuts that were priced in and led to the sharp decline in gold prices, there is now a chance for three interest rate cuts under a more accommodating policy.” Bullion is down 1.3% so far this week after the Fed’s “dot plot” on Wednesday indicated less easing than anticipated in September, with only two 25-bps rate reduction by 2025.
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