Gold rises on softer dollar as focus shifts to US inflation data

Manama, May 28 (BNA): Gold prices gained on Tuesday, helped by a weaker dollar as investors look forward to U.S. inflation data due later this week for more clarity on interest rate cut timings.

 

Spot gold was up 0.3% at $2,357.74 per ounce by 12:40 p.m. ET (1640 GMT). U.S. gold futures rose 1% to $2,358.50, Reuters reported. 

 

The dollar slipped 0.2% to a more than one-week low, making gold less expensive for other currency holders.

 

Focus this week will be on the U.S. core personal consumption expenditures price index (PCE), the Fed’s preferred inflation gauge, due on Friday.

 

Fed meeting minutes released last week showed that the policy response, for now, would involve maintaining the benchmark rate at its current level.

 

Traders are pricing in, opens new tab about a 63% chance of a Fed rate cut by November. Lower interest rates reduce the opportunity cost of holding non-yielding gold.

 

Demand from global central banks for gold has been elevated for two years as they diversify their foreign currency reserves.

 

Meanwhile, global physically-backed gold exchange-traded funds (ETFs) saw net outflows of 11.3 metric tons last week, according to the World Gold Council.

 

Silver gained 1% to $31.99 after a 4.4% jump on Monday. Platinum climbed 0.7% to $1,061.15. Palladium eased 0.4% to $984.46.

 

Y.R