GOLD prices edged higher on Thursday (Jun 20) as lacklustre US economic activity fuelled expectations that the Federal Reserve would cut interest rates this year.
Spot gold was up 0.2 per cent at US$2,331.38 per ounce, as at 0126 GMT. US gold futures edged 0.1 per cent lower to US$2,345.00.
With recent data showing moderation in the labour market and price pressures, the US Fed is looking for further confirmation that inflation is cooling as they steer cautiously towards what most expect to be an interest rate cut or two by the end of this year.
US retail sales edged 0.1 per cent higher last month, the Commerce Department’s Census Bureau said. Economists polled by Reuters had forecast retail sales gaining 0.3 per cent in May.
Investors are now focussed on weekly jobless claims due at 1230 GMT and flash purchasing managers’ indexes on Friday, which could offer more clarity on consumption and economic strength.
Chicago Federal Reserve Bank president Austan Goolsbee on Tuesday called the most recent consumer price inflation reading “excellent”, and said he sees the potential for more inflation cooling this year.
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Traders are currently pricing in about a 66 per cent chance of a Fed rate cut in September, according to CME FedWatch Tool.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Elsewhere, Britain’s central bank looks on course to hold interest rates at a 16-year high of 5.25 per cent as underlying inflation pressures prove persistent.
Spot silver rose 0.5 per cent to US$29.91 per ounce, platinum was down 0.2 per cent at US$978.42 and palladium lost 0.2 per cent to US$903.25. REUTERS
