Gold edges up on weaker dollar, bets of Fed pause

GOLD prices edged higher on Friday (Apr 14) set for a second consecutive weekly gain, as the US dollar eased and recent economic data prompted bets that the Federal Reserve is nearing the end of its rate-hike cycle.

Spot gold was up 0.2 per cent at US$2,043.16 per ounce, as of 0044 GMT, hovering near a one-year high reached on Thursday. US gold futures were unchanged at US$2,054.60.

The dollar index was 0.1 per cent lower, making bullion cheaper for buyers holding other currencies.

Data on Thursday showed US producer prices unexpectedly fell by 0.5 per cent in March, and there were signs that underlying producer inflation was subsiding.

Moreover, the number of Americans filing new claims for unemployment benefits increased more than expected last week, a further sign that labour market conditions were loosening up as higher borrowing costs dampen demand in the economy.

Data released on Wednesday showed that the US Consumer Price Index rose 0.1 per cent last month after advancing 0.4 per cent in February.

These economic readings, along with fears of a mild recession, have helped bullion gain about 1.7 per cent so far in the week.

The CME FedWatch tool shows markets are pricing in a 68.7 per cent chance of a 25 basis-point hike in May, with rate cuts seen in the back half of the year.

Gold is traditionally considered a hedge against inflation and economic uncertainties, but higher interest rates dim non-yielding bullion’s appeal.

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Gold ticks up as dollar softens after cooler US inflation data

Spot silver rose 0.2 per cent to US$25.85 per ounce, platinum added 0.5 per cent at US$1,052.59 and palladium gained 0.8 per cent to US$1,511.49. REUTERS