Gold flat as sticky US inflation tempers hopes for early rate cut

GOLD prices were little changed on Thursday (Apr 11), as the US dollar and Treasury yields firmed after hotter-than-expected inflation data tempered hopes for an early interest rate cut.

Spot gold was unchanged at US$2,337.99 per ounce, as at 0107 GMT. It hit a record high for an eighth straight session until Tuesday.

US gold futures edged 0.3 per cent higher to US$2,355.30 per ounce.

The US dollar index hovered near a five-month high hit in the previous session and US Treasury yields spiked after the inflation data, making non-yielding bullion less attractive.

US consumer prices increased more than expected in March amid rises in the costs of petrol and shelter, casting further doubt on whether the Federal Reserve will start cutting interest rates in June.

Fed officials worried last month that progress on inflation might have stalled, making a longer period of tight monetary policy necessary, according to the minutes of the US central bank’s Mar 19 to 20 meeting.

Higher interest rates reduce the appeal of holding non-yielding gold.

The Shanghai Futures Exchange will impose trading limits on its gold and copper contracts, it said on Wednesday, following sharp price rallies by both metals.

Sibanye Stillwater said it may look to raise about US$500 million through prepayment arrangements such as so-called metals streaming to shore up its cash position, even as the company sees an improvement in metal prices and the market outlook.

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Spot silver fell 0.3 per cent to US$27.89 per ounce, platinum edged up 0.5 per cent to US$964.20 and palladium lost 0.6 per cent to US$1,045.00. REUTERS