Gold prices rose more than 1% on Friday and were on track for their first weekly gain in four as signs of slowing inflation in the U.S. raised hopes of a rate cut later this year, while a stock selloff across Europe also lent support.
Spot gold was up 1.2% at $2,331.69 per ounce by 1410 GMT. Bullion has gained 1.6% so far this week.
U.S. gold futures rose 1.3% to $2,347.40.
In wider financial markets, European stock indexes dropped as French assets took a beating due to the country’s political turmoil. Cautious mood prevailed on Wall Street, with investors pausing after strong gains in the S&P 500 and the Nasdaq indexes.
“That combination of weaker equities, and some interest rate declines (in Fed funds futures pricing), are reigniting interest in gold, despite the fact that the Federal Reserve has moved the dots at its FOMC meeting,” said Bart Melek, head of commodity strategies at TD Securities. Traders raised their bets to price in about 52 basis points (bps) of cuts (or two quarter-point cuts) by December-end after softer inflation data this week.
Lower rates tend to boost appeal for non-yielding bullion by making it a more attractive investment, compared with other assets such as Treasury bonds.
Data this week showed consumer prices were unchanged in May for the first time in nearly two years, while producer prices unexpectedly fell. Despite the U.S. Federal Reserve’s median “dot plot” projecting just one quarter-point cut, market reassessment is necessary for the near term.
Spot silver rose 0.5% to $29.13 per ounce after hitting its lowest level in nearly one month in the previous session. Platinum was up 0.6% at $951.88 and palladium gained 0.8% to $890.25.
This boost in gold prices comes at a time when investors are seeking safe-haven assets due to geopolitical tensions and uncertainty in financial markets. Gold has traditionally been seen as a hedge against economic volatility, making it an attractive option for investors looking to diversify their portfolios.
Gold prices rose more than 1% on Friday and were on track for their first weekly gain in four as signs of slowing inflation in the U.S. raised hopes of a rate cut later this year, while a stock selloff across Europe also lent support.
Spot gold was up 1.2% at $2,331.69 per ounce by 1410 GMT. Bullion has gained 1.6% so far this week.
U.S. gold futures rose 1.3% to $2,347.40.
In wider financial markets, European stock indexes dropped as French assets took a beating due to the country’s political turmoil. Cautious mood prevailed on Wall Street, with investors pausing after strong gains in the S&P 500 and the Nasdaq indexes.
“That combination of weaker equities, and some interest rate declines (in Fed funds futures pricing), are reigniting interest in gold, despite the fact that the Federal Reserve has moved the dots at its FOMC meeting,” said Bart Melek, head of commodity strategies at TD Securities. Traders raised their bets to price in about 52 basis points (bps) of cuts (or two quarter-point cuts) by December-end after softer inflation data this week.
Lower rates tend to boost appeal for non-yielding bullion by making it a more attractive investment, compared with other assets such as Treasury bonds.
Data this week showed consumer prices were unchanged in May for the first time in nearly two years, while producer prices unexpectedly fell. Despite the U.S. Federal Reserve’s median “dot plot” projecting just one quarter-point cut, market reassessment is necessary for the near term.
Spot silver rose 0.5% to $29.13 per ounce after hitting its lowest level in nearly one month in the previous session. Platinum was up 0.6% at $951.88 and palladium gained 0.8% to $890.25.
This boost in gold prices comes at a time when investors are seeking safe-haven assets due to geopolitical tensions and uncertainty in financial markets. Gold has traditionally been seen as a hedge against economic volatility, making it an attractive option for investors looking to diversify their portfolios.
