GOLD prices edged higher on Thursday (May 16), supported by a softer US dollar and lower Treasury yields after data signalled cooling US inflation, bolstering bets for an interest rate cut by the Federal Reserve.
Spot gold was up 0.3 per cent at US$2,393.21 per ounce, as at 0043 GMT. Bullion prices rose 1 per cent on Wednesday.
US gold futures edged 0.1 per cent higher to US$2,397.60.
The US dollar fell 0.2 per cent against a basket of other major currencies, making gold more attractive for other currency holders. Benchmark 10-year Treasury yields hit their lowest in a more than one month.
US CPI rose 0.3 per cent last month after advancing 0.4 per cent in March and February, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut.
Federal Reserve policymakers waiting to see renewed progress on inflation before reducing borrowing costs got some encouraging data on Wednesday with a government report showing inflation eased a bit in April.
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Lower interest rates reduce the opportunity cost of holding non-yielding gold.
Chicago Federal Reserve Bank president Austan Goolsbee said he was optimistic inflation would continue to come down.
Escalation of the US-China trade war seems unavoidable whoever wins the White House in November, but the equally inevitable inflationary pressures that brings will not automatically steer the Federal Reserve towards a more hawkish policy stance.
India’s merchandise trade deficit in April was wider than expected, hurt by lower exports and a surge in gold imports, government data showed on Wednesday.
It’s ‘green for go’ in Asia as stock markets around the world roar to fresh highs, boosted by renewed optimism that the Federal Reserve will soon start cutting US interest rates.
BHP Group’s options for its pursuit of rival miner Anglo American include sweetening its US$42.7 billion buyout offer, making a hostile bid or walking away for now as it approaches a May 22 deadline to lodge a binding offer.
Spot silver was unchanged to US$29.71 per ounce, platinum was up 0.5 per cent at US$1,069.45 and palladium gained 0.3 per cent to US$1012.84. REUTERS
