Gold digs its heels in as it prepares for the ultimate showdown with US inflation

Gold maintains strength before US inflation assessment

Gold prices are getting cozy in a tight range, just like a cat curling up for a nap on a lazy Sunday afternoon. They are hanging out near a near seven-month high, waiting with bated breath for a key inflation print to see if interest rate cuts in the U.S. will arrive sooner than expected. The suspense is killing them!

Currently, spot gold is playing it cool at $2,044.79 per ounce, not budging an inch. It reached its highest level since May 5 yesterday, showcasing its prowess like a superhero soaring through the skies. And get this, it’s on track for its second straight monthly gain. Go gold, you’re on fire! Well, not literally, because that would be a disaster.

Meanwhile, U.S. gold futures for December delivery are down 0.2% at $2,045.30 per ounce. They seem to be taking a slight breather, catching their breath before the U.S. personal consumption expenditure data, which is like the Fed’s preferred inflation gauge, is revealed at 1330 GMT. It’s like waiting for the big reveal in a mystery novel. Who did it? Will interest rate cuts be announced? The anticipation is palpable.

Speaking of interest rate cuts, Federal Reserve officials have been hinting at the possibility. They expect growth to slow down and inflation to keep easing, dragging yields on 10-year Treasury notes to a two-and-a-half-month low. Lower interest rates would make holding non-interest-bearing bullion like holding a hot potato without burning your fingers. It suddenly becomes more appealing.

Traders are getting in on the action too. According to CME’s FedWatch Tool, their bets for a rate cut by the U.S. central bank have skyrocketed from an 80% chance in May to a one-in-two chance in March. It’s like a game of poker, with everyone trying to predict the next move. Will it be a rate cut or not? The stakes are high, my friends.

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Adding more fuel to the fire is the weak performance of the dollar. The dollar index, like a tired and worn-out athlete, is drifting near three-month lows. In fact, it’s set to log its worst monthly performance in a year. That’s like an Olympic gymnast stumbling during their routine. Oops, tough luck!

Oh, and let’s not forget about our friend spot silver. It fell 0.1% to $24.98 per ounce. Silver just wants to join the excitement and be part of the party. Platinum, on the other hand, is up 0.2% at $933.52, strutting its stuff like a peacock showing off its colorful feathers. And palladium? Well, it’s steady at $1,027.45 per ounce, not wanting to cause any drama. Just hanging out, being cool.

All eyes are now on Fed Chair Jerome Powell, who is due to speak on Friday. Will he reveal any secrets or drop hints about future moves? We shall wait and see, my fellow financial enthusiasts.

Alright, folks, that’s all for now. Keep an eye on those gold prices, cheer for your favorite metals, and may your investments shine brighter than a supernova! Remember, finance can be fun too. Until next time!

Original content source: Reuters

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