Gold climbs as dollar pauses ahead of US inflation data

April 12, 2023 04:35 AM AEST | By Reuters
Follow us on Google News:
Image source: Reuters

By Deep Kaushik Vakil

(Reuters) - Gold climbed back up above the key $2,000 level on Tuesday as the dollar came off last session's peak, while traders hunkered down for Wednesday's U.S. inflation data for cues on future interest rate hikes.

Spot gold rose 0.8% to $2,005.79 per ounce by 2:00 p.m. EDT (1800 GMT) while U.S. gold futures settled 0.8% higher at $2,019.00.

Bullion found some respite from a pause in the dollar, following a bounce in the previous session, also helping offset pressure from higher Treasury yields.

"At this stage of the game, the market isn't particularly fussed on whether we get another 25 basis points" from the Federal Reserve in May, said Bart Melek, head of commodity strategies at TD Securities.

"The market is looking at the pivot and signalling lower rates as we move deeper into the second half of 2023."

The prospect of the Fed raising its benchmark interest rate only once more by 25 basis points is a useful starting point, said New York Fed President John Williams, while Chicago Fed President Austan Goolsbee said the central bank should be cautious about raising interest rates in the face of recent banking stress.

Gold shed nearly 1% on Monday after strong U.S. jobs data on Friday raised the chances of a May rate hike to around 70%.

The U.S. consumer price index (CPI) data on Wednesday could yield signs on how long the Fed would continue its campaign against inflation.

"Should CPI push higher and support monetary policy tightening after strong non-form payroll figures, real yields may turn higher thus increasing the opportunity cost of holding gold," DailyFX analyst Warren Venketas wrote in a note.

Central banks should not halt their fight against inflation because of financial stability risks, IMF chief economist Pierre-Olivier Gourinchas said.

Silver was up 0.8% to $25.08 per ounce, platinum gained 0.6% to $997.20 while palladium jumped 3% to $1,454.17.

GRAPHIC - Bitcoin and gold outperform S&P 500 since banking turmoil

(Reporting by Deep Vakil in Bengaluru; Editing by Christina Fincher, David Holmes and Krishna Chandra Eluri)


The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK