Gold prices hover near 1-month peak on renewed rate-cut hopes
Gold prices were stable on Thursday after hitting their highest levels in more than a month, as softer U.S. core inflation data lifted expectations of interest rate cuts, although news of a ceasefire accord between Israel and Hamas capped further gains.
Spot gold held its ground at $2,696.30 per ounce, as of 0301 GMT, after hitting its highest point since Dec. 12 earlier in the session. U.S. gold futures gained 0.3% to $2,725.20.
"Easing underlying inflation in the U.S. renewed hopes of a less restrictive Fed policy this year. The core inflation unexpectedly slowed, while headline consumer prices showed no significant upside surprises," said Jigar Trivedi, senior analyst at Reliance Securities.
"That supported bullion demand as progress in disinflation could prompt the FOMC to ease monetary policy, reducing the opportunity cost of holding non-yielding assets."
Concerns persist over potential tariffs from U.S. President-elect Donald Trump's incoming administration, which could further exacerbate inflationary pressures.
Central bank officials said data released on Wednesday showed U.S. inflation was continuing to ease even as they noted heightened uncertainty in the coming months, as they await a first glimpse of the incoming Trump administration's policies.
Supporting bullion, the dollar slipped on Thursday to stand just off recent peaks as cooling U.S. inflation data knocked down bond yields. [US/][USD/]
The prospect of more Fed rate cuts this year heightened following the data, and interest rate futures traders on Wednesday were pricing in near-even odds that the U.S. central bank would reduce rates twice by the end of this year, with the first reduction to come in June.
Elsewhere, Israel and Hamas reached a ceasefire and hostage agreement, reducing some safety appeal of the metal, Trivedi said.
Spot silver shed 0.2% to $30.61 per ounce and palladium dropped 0.3% to $958.50. Platinum steadied at $938.25.
