Gold prices rose more than 1 per cent yesterday as weaker-than-expected US inflation data reignited hopes for Federal Reserve rate cuts this year, offsetting concerns from stronger-than-expected jobs data earlier in the week.
Spot gold was up 1.4pc at $4,987.59 per ounce as of 11:04am ET (1604 GMT), and up 0.6pc so far this week. Bullion fell about 3pc on Thursday, hitting its lowest in nearly a week.
US gold futures for April delivery rose 1.3pc to $5,010.80 per ounce.
“Gold, and particularly silver, is enjoying a relief rally after a mild January CPI reading eased nerves stoked by Wednesday’s strong employment report,” said Tai Wong, an independent metals trader.
Spot silver climbed 3.2pc to $77.55 per ounce, snapping back from an 11pc decline in the previous session.
It was on track for a weekly loss of 0.3pc.
The US Consumer Price Index rose 0.2pc in January, below economists’ expectations of a 0.3pc increase, following an unrevised 0.3pc gain in December, the Labour Department said.
Market participants currently anticipate a total of 63 basis points in rate cuts this year, with the first expected in July, according to data compiled by LSEG.
Non-yielding bullion tends to do well in low interest-rate environments.
Meanwhile, data on Wednesday showed the United States added 130,000 jobs in January, compared with analysts’ estimates of 70,000.
China’s gold demand stayed strong ahead of the Lunar New Year, while in India, the market flipped to a discount.
ANZ analysts raised their Q2 gold forecast to $5,800/oz from $5,400, citing its appeal as an insurance asset, while noting that silver, though still supported by strong investment demand, may see its recent outperformance fade as industrial buyers balk at higher prices.
Spot platinum rose 3.6pc to $2,072.52 per ounce and palladium was up 3.3pc at $1,669.25. Both metals were set to notch weekly losses.
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