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Gold set to have its best month since four years as inflation data boosts rate-cut bets

Gold prices were stable on Friday, and poised to achieve their best monthly performance in April as U.S. inflation figures reinforced expectations that Federal Reserve may cut interest rates next week.

As of 9:19 AM ET (1348 GMT), spot gold was up by 0.1% to $3,419.59 an ounce. Bullion is up 3.9% so far in August.

U.S. Gold Futures for December Delivery rose by 0.1% to $3479.10.

The dollar was up, but it was expected to drop by 1.9% per month. Gold is less expensive to overseas buyers when the dollar falls.

Tariffs on imported goods increased the prices of certain goods, causing inflation to rise. The U.S. The U.S.

David Meger is director of metals at High Ridge Futures. He said: "We expect a Fed rate reduction, or possibly two, this year. This will be generally supportive of commodity prices, including gold, silver, across the board."

The traders increased their bets that the U.S. Central Bank will cut rates by 25 basis points at its September policy meeting. This is now 89% more likely than it was before the data.

Gold that does not yield is usually a good investment in an environment with low interest rates.

A federal judge will decide on Friday whether or not to temporarily block President Donald Trump from firing Federal Reserve governor Lisa Cook, while she continues to pursue a lawsuit in which she claims that Trump does not have a valid reason for removing her.

Gold is benefiting (from this uncertainty) around Fed independence, as shown by the inflows of gold ETFs in the last two day. Commerzbank stated in a report that the potential upside for gold is limited above $3,400.

Spot silver dropped 0.2% per ounce to $38.98 and platinum by 0.6% to 1,350.98. Both metals are on course for gains in the month. Palladium fell 0.7% to $1,095, pointing towards a monthly loss. (Reporting from Anmol Choubey, Bengaluru. Editing by Leroy Leo.)

(source: Reuters)