Gold prices climb as Middle East tensions rise, US inflation eases
Thu June 12 2025
Gold prices rose on Thursday, as rising Middle East tensions boosted demand for safe-haven assets, while softer-than-expected U.S. inflation data raised expectations of potential interest rate cuts by the Federal Reserve.
FUNDAMENTALS
* Spot gold was up 0.3% at $3,364.10 an ounce, as of 0017 GMT. U.S. gold futures gained 1.2% to $3,384.40.
* The U.S. dollar index edged 0.1% lower, making greenback-priced bullion less expensive for overseas buyers.
* Gold prices gained as investors sought safe-haven assets amid rising geopolitical uncertainty sparked by U.S. President Donald Trump's comments that U.S. personnel were being relocated from the Middle East due to heightened risks.
* The U.S. data prompted renewed calls from Trump for the Fed to implement significant rate cuts.
* Data showed the Consumer Price Index rose 0.1% in May, below economists' expectations of 0.2%, as lower gasoline prices partially offset increases in rent. However, inflation is expected to accelerate in the coming months due to import tariffs imposed by the Trump administration.
* Traders now expect a 50-basis-point rate cut by the year-end, with market participants awaiting U.S. producer price index data, due at 1230 GMT, for additional signals on the Fed's policy path ahead of its June 17-18 meeting.
* Meanwhile, Trump said on Wednesday that a deal to restore a fragile truce in the U.S.-China trade war had been reached after negotiators from Washington and Beijing agreed on a framework covering tariff rates.
* Trump added that he would be willing to extend a July 8 deadline for completing trade talks with other countries before higher U.S. tariffs take effect but did not believe that would be necessary.
* Elsewhere, spot silver was up 0.3% at $36.32 per ounce, platinum rose 0.8% to $1,265.32, still hovering near more than 4-year high, while palladium was down 1% at $1,069.65.