Gold Little Changed as Traders Weigh Reduced Rate-Cut Prospects
Gold was steady after the release of monthly US inflation data dimmed prospects for the Federal Reserve to lower interest rates as the war in the Middle East drags on.
Bullion was near $5,175 an ounce in early trading, having slipped 0.3% in the previous session. While core US inflation was tame at the start of the year, before the conflict began, forward-looking inflationary concerns have reduced the likelihood for the Fed to trim borrowing costs. The European Union, meanwhile, warned that its inflation could surpass 3% this year.
Now entering its 13th day, the US-Israeli war with Iran continues to disrupt oil production and refining across the Middle East. Crude rose for a second day as concerns over a prolonged conflict outweighed the biggest-ever emergency release of reserves by wealthy nations.
As well as enduring the prospect of higher borrowing costs — a headwind for bullion, which doesn’t pay interest — gold is a source of liquidity used by investors to shore up other parts of their portfolios when needed. The metal has still advanced around a fifth this year, gaining some support from its role as a haven in times of geopolitical upheaval.
Spot gold was little changed at $5,176.20 an ounce as of 6:14 a.m. in Singapore. Silver slid 0.1% to $85.63. Platinum and palladium traded lower. The Bloomberg Dollar Spot Index, a gauge of the US currency, ended the previous session up 0.2%.
Source: Bloomberg
