Gold prices edge higher as US dollar, yields soften
Thu May 16 2024
Gold prices edged higher on Thursday, supported by a softer dollar and lower Treasury yields after data signalled cooling U.S. inflation, bolstering bets for an interest rate cut by the Federal Reserve.
FUNDAMENTALS
* Spot gold was up 0.3% at $2,393.21 per ounce, as of 0043 GMT. Bullion prices rose 1% on Wednesday.
* U.S. gold futures edged 0.1% higher to $2,397.60.
* The dollar fell 0.2% against a basket of other major currencies, making gold more attractive for other currency holders. Benchmark 10-year Treasury yields hit their lowest in a more than one month.
* U.S. CPI rose 0.3% last month after advancing 0.4% in March and February, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut.
* Federal Reserve policymakers waiting to see renewed progress on
inflation before reducing borrowing costs got some encouraging data on
Wednesday with a government report showing inflation eased a bit in April.
* Lower interest rates reduce the opportunity cost of holding non-yielding
gold.
* Chicago Federal Reserve Bank President Austan Goolsbee said he was optimistic inflation would continue to come down.
* Escalation of the U.S.-China trade war seems unavoidable whoever wins the White House in November, but the equally inevitable inflationary pressures that brings won't automatically steer the Federal Reserve toward a more hawkish policy stance.
* India's merchandise trade deficit in April was wider than expected, hurt by lower exports and a surge in gold imports, government data showed on Wednesday.
* It's 'green for go' in Asia as stock markets around the world roar to fresh highs, boosted by renewed optimism that the Federal Reserve will soon start cutting U.S. interest rates.
* BHP Group's options for its
pursuit of rival miner Anglo American include
sweetening its $42.7 billion buyout offer, making a hostile bid or walking away
for now as it approaches a May 22 deadline to lodge a binding offer.
* Spot silver was unchanged to $29.71 per ounce, platinum was up 0.5% at
$1,069.45 and palladium gained 0.3% to $1012.84.