Gold heads higher following US inflation data

Unsurprising stats mean Fed cuts still a possibility.

Gold headed for its strongest close in a month after the Federal Reserve’s preferred inflation gauge met consensus forecasts, keeping open the possibility of interest rate cuts later in the year.

Spot bullion traded above $2,046 an ounce, on track for a modest weekly gain and the highest finish since Feb. 1. Although the US data showed underlying inflation running at the fastest pace in a year, the reading wasn’t a surprise and failed to dent the broader disinflationary trend underpinning forecasts for policy easing. Lower interest rates tend to benefit non-yielding gold.

Gold prices swung in February, dropping back below $2,000 an ounce mid-month, and then recovering in line with investor expectations for when the Fed will be in a position to pivot. On Thursday, Fed Bank of San Francisco President Mary Daly said officials are ready to lower rates as needed but emphasized there’s no urgency given the strength of the economy.
Spot gold was 0.1% higher at $2,046.58 an ounce at 11:48 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat. Silver, platinum and palladium all headed for weekly declines.