BENGALURU- Gold prices inched up on Thursday following a sharp rise in the last session as the dollar and bond yields weakened on the increasing likelihood of rate cuts by the US Federal Reserve as early as September.
Spot gold rose 0.1 percent at $2,388.10 per ounce, after gaining more than 1 percent to its highest since April 19 on Wednesday. US gold futures rose 0.1 percent to $2,393.20.
The dollar fell 0.2 percent against a basket of other major currencies, making the greenback-priced bullion less expensive for other currency holders. The benchmark 10-year Treasury yield hit its lowest in more than one month.
“Following the April consumer price index data, the odds for a potential September rate cut have firmed, which suits the gold price from a yield perspective,” said Tim Waterer, chief market analyst at KCM Trade.
“With inflation coming off the boil, gold is effectively making hay while the sun is shining and looks poised to capture the $2,400 level. However, a potential bounce in the dollar or treasury yields could be the biggest hurdle for gold price in the remainder of the week.”
Cooling US consumer prices along with last week’s lacklustre jobs report and a softer-than-expected US payrolls report for April comes as good news to Fed policymakers waiting to see renewed progress on inflation before reducing borrowing costs.
