Gold price remains strong despite mild increase in U.S. inflation data

Gold and Silver Prices React to U.S. Inflation Data

Gold and silver prices are firmly higher in early U.S. trading Friday, showing little reaction to the U.S. inflation report that exceeded market expectations. The data favored U.S. monetary policy hawks, urging the Federal Reserve to hold off on cutting interest rates. June gold was last up $17.80 at $2,360.00, while May silver was last up $0.247 at $27.61.

U.S. Inflation Data

The personal income and outlays report for March, including the PCE inflation indexes closely watched by the Federal Reserve, revealed the March PCE price index up 2.7% year-on-year, slightly higher than the expected 2.6%. The core PCE index, excluding food and energy, rose by 2.8%, exceeding market expectations of 2.7% on an annual basis. Thursday’s PCE inflation numbers in the 1Q GDP report also surpassed forecasts.

Global Gold Demand

Chinese gold buyers are turning to gold amidst economic uncertainty, boosting a global bullion rally. Gold consumption in China rose nearly 6% in the first quarter, with imports of gold raw materials surging by 78% in the same period.

Market Trends and Outlook

Technically, gold futures bulls have the firm near-term advantage, targeting a close above $2,400.00. Meanwhile, silver bulls hold the overall near-term technical advantage, aiming to surpass solid resistance at $28.795. U.S. Treasury yields hit five-month highs this week, impacting precious metals prices.

Upcoming Economic Data

Other U.S. economic data scheduled for release includes the University of Michigan consumer sentiment survey, adding further insight into consumer behavior and economic outlook.