Gold price traded in positive territory as the US dollar fell.
On Thursday, the gold price (XAUUSD) rose against the backdrop of a lower US dollar.
The lower US CPI inflation report fueled speculation that the Fed might cut interest rates, raising the price of precious metals.
The most recent Consumer Price Index (CPI) report showed that inflation in the United States decreased in April, causing market participants to raise their bets on rate reduction by the Federal Reserve (Fed) this year. A lower interest rate may benefit the yellow metal, as it implies that The borrowing cost of investing in gold drops.
The Fed’s hawkish remarks could limit gold’s upside; Fed officials Barr, Harker, Mester, and Bostic are scheduled to speak on Thursday.
On Thursday, gold traders will focus on US building permits, housing starts, weekly initial jobless claims. The Philadelphia Fed Manufacturing Index, and industrial production. Barr, Harker, Mester, and Bostic of the Federal Reserve are also expected to speak on Thursday. Nonetheless, hawkish statements from Fed officials may strengthen the US Dollar (USD). While limiting the precious metal’s gains in the immediate term.
Daily Market Movers: Gold prices edge higher due to falling US inflation and lower retail sales.
The US Consumer Price Index (CPI) grew by 3.4% YoY in April, compared to 3.5% in March. Meeting market forecasts. On a monthly basis, the headline CPI inflation decreased to 0.3% MoM in April from 0.4% in March, which was lower than the consensus estimate of 0.4%.
Core CPI inflation, which excludes volatile commodities like as food. And energy, increased by 3.6% year on year in April, up from 3.8% the previous month. The monthly core CPI fell to 0.3% MoM in April, from 0.4% in March.
US retail sales fell 0% month on month in April after rising 0.6% in March, falling short of the forecast of 0.4%.
Fed Bank of Minneapolis President Neel Kashkari said on Wednesday that the central bank must closely monitor the economy to determine if present policy rates are sufficiently restrictive.
Financial markets are now pricing in a nearly 75% possibility of a rate decrease by the Fed in September 2024, up from 65%.According to the CME’s FedWatch Tool, this occurred prior to the US CPI release.
According to the World Gold Council’s Q1 2024 report, global gold demand increased by 3% to 1,238 tons, its highest first quarter since 2016.
