Gold prices have seen a slight increase this Friday amidst stable US inflation rates, which align with expectations. However, global gold prices are on track for their weakest week since December due to a decrease in geopolitical risk premiums.
According to CNBC, the spot price of gold rose 0.3% to USD 2,339.70 per ounce. Despite this increase, gold is set for its worst week since last December, as fears over a major crisis in the Middle East have eased. Meanwhile, US futures saw a 0.4% rise to USD 2,351.60.
The US personal consumption expenditures (PCE) price index rose by 0.3% last month, matching forecasts. This development is unlikely to shift expectations that the US Federal Reserve will delay any interest rate cuts until September.
US Treasury yields dipped following the release of the inflation data, enhancing the appeal of gold bars among investors as a safer asset.
Traders expect gold to consolidate in the short term within a range of USD 2,300 to USD 2,400, depending on overall risk sentiment and buying volume from the East.
Initial market forecasts had anticipated a US interest rate cut as early as March, then June, and now September, amid strong national economic data. High US interest rates typically reduce the attractiveness of holding non-yielding bullion.
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China’s gold purchases in the first quarter rose nearly 6% from the previous year, according to the country’s Gold Association, indicating a significant impact on global gold demand dynamics.
The movement in gold prices highlights the broader economic impacts of US monetary policy and geopolitical tensions. These factors are crucial for investors considering gold as part of their investment portfolio, providing insight into the global economic landscape and investment security.
Amid stable inflation and subdued geopolitical risks, global gold prices have seen modest gains, reflecting ongoing market dynamics influenced by US economic policies and international tensions. This scenario underlines the complex interplay between inflation expectations and investment strategies in precious metals.
Source: Liputan6 (2024)
