Gold held a record high ahead of US inflation data on Wednesday that could provide clues for the path forward on interest rates.
Bullion was near USD2,340 an ounce in early Asian trading after closing 0.4% higher on Monday. The consumer price index print for March is expected to show some signs of easing, according to economists surveyed by Bloomberg. That scenario may provide the Federal Reserve with more wiggle room to cut rates.
Gold is up more 17% since mid-February, a move that has left some onlookers puzzled because of the lack of any obvious trigger — especially given traders’ conviction on three quarter-point rate cuts is fast fading, with markets now favouring just two reductions.
Still, heightened geopolitical risks in the Middle East and Ukraine, plus buying by central banks, led by China, have added some bullish momentum for gold.
Spot gold was flat at USD2,339.91 an ounce at 8:02 a.m. in Singapore after rising to a record USD2,353.95 on Monday, even after Treasury 10-year yields climbed to the highest since November as traders positioned for the inflation data.
The Bloomberg Dollar Spot Index was little changed on Tuesday, while silver, platinum and palladium all edged up slightly. – Bloomberg
