Gold retreated from its record high ahead of the US CPI data, signaling a potential end to nine consecutive sessions of gains. Spot gold fell 0.3% to $2,176.79 per ounce, below the record $2,194.99 on Friday, with US gold futures also down 0.3%. The market awaits the US CPI report for further indications on the Federal Reserve’s next move. Bullion remains supported by strong speculative interest and solid physical demand.
Gold edged further away from a record peak on Tuesday as it looks set to break nine straight sessions of gains ahead of critical U.S. inflation data that could pave the way for imminent interest rate cuts by the Federal Reserve.
Spot gold fell 0.3% to $2,176.79 per ounce as of 1032 GMT, trading below a record high of $2,194.99 it hit on Friday. U.S. gold futures also dipped 0.3% to $2,182.90.
“The markets are now on the sit-and-wait mode for the release of U.S. inflation data later today in the hope of gathering further clues on what the Fed will do next,” said Ricardo Evangelista, senior analyst at ActivTrades.
The U.S. consumer price index (CPI) report for February, due at 1230 GMT, is expected to rise 0.4% for the month and keep the annual pace steady at 3.1%.
The Fed is likely to cut its key interest rate in June, according to a strong majority of economists in the latest Reuters poll, as it waits for more data to confirm if inflation is headed toward its 2% target.
Low interest rates help gold prices as they reduce the opportunity cost of holding non-yielding bullion.
“The gold market seems to be surfing on a big wave of bullish sentiment, which might push prices even higher in the short term. That said, in the medium-to-longer term, we still see more downside than upside,” said Julius Baer analyst Carsten Menke.
Bullion is riding high on strong speculative interest and solid physical gold demand from investors seeking safety of the bullion amid the ongoing geopolitical tensions.
“The Chinese central bank will continue to buy gold in the coming months, which should therefore remain a support for the gold price,” Commerzbank wrote in a note.
Spot platinum fell 0.2% to $931.00 per ounce, palladium lost 1.3% to $1,016.84, while silver was unchanged at $24.43.
In recent days, the price of gold has shown signs of pulling back from its record high, sparking interest and concern among investors and analysts. The key catalyst for this shift in the market sentiment has been the upcoming release of the US Consumer Price Index (CPI) data. As investors brace themselves for potentially impactful insights into inflation trends, the gold market braces itself for potentially pivotal developments. Historically, gold has been viewed as a hedge against inflation, and any unexpected rise in inflation could spur increased demand for this precious metal. The market’s response to the impending CPI data underscores the delicate balance of economic indicators and their impact on the price of gold. As we await the CPI release, it’s important to stay attuned to the broader economic landscape and the potential implications for gold as a haven asset. Keep a close eye on future developments as we navigate this dynamic market environment.
Source: ARY NEWS
Gold price retreats from record high ahead of US CPI data, showing potential for interest rate cuts by the Federal Reserve. Spot gold and U.S. gold futures dip as markets await U.S. inflation data. Analysts anticipate a potential interest rate cut in June. Low interest rates benefit gold prices. Bullion experiences strong speculative interest and solid physical gold demand amid geopolitical tensions. Chinese central bank’s gold purchases expected to support gold prices. Platinum, palladium, and silver prices also fluctuate.
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