Gold prices advanced on Thursday as demand for the safe-haven metal rose on expectations of an interest rate cut by the US Federal Reserve following soft inflation data, and on escalating trade tensions between the world’s top two economies.
Spot gold was up 0.3 per cent at $1,336.48 per ounce, as of 0542 GMT. US gold futures were 0.2 per cent higher at $1,339.80 an ounce.
We can see strong support at $1,330 for gold, and the metal looks to trade upside with expectations of lower interest rates,” said Peter Fung, head of dealing at Wing Fung Precious Metals.
Data from the Labor Department showed on Wednesday US consumer prices barely rose in May, pointing to moderate inflation that together with a slowing economy increased pressure on the Federal Reserve to cut interest rates this year.
On the trade front, US President Donald Trump said he had a “feeling” a US-China trade deal could be reached, but reiterated his threat of increasing tariffs on Chinese goods if there is no agreement.
Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.5 per cent to 759.70 tonnes on Wednesday from 756.18 tonnes on Tuesday.
Palladium eased 0.2 per cent to $1,403.35 an ounce after hitting a more than one-month high of $1,414.40 in the previous session.
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