Gold gains 2nd week on weak dollar, Fed pause prospects. Gold prices rose for a second week on Friday as the U.S. dollar fell, and recent economic data suggested the Federal Reserve may be reaching the end of its rate-hike cycle.
As of 0534 GMT, spot gold was up 0.1% at $2,042.01 per ounce, near its one-year high from Thursday. U.S. gold futures increased 0.1% to $2,056.70.
The dollar index dropped to a year-low, making bullion cheaper for foreign purchasers.
“The appetite to sell the U.S. dollar in the wake of soft inflation data, lower yields and calls for a lower terminal Fed rate have been huge drivers for gold,” said City Index senior market analyst Matt Simpson.
The March producer price index decreased the most since April 2020, while the consumer price index grew less than forecast.
Last week, more Americans filed new jobless claims than expected, indicating a tightening labor market as rising borrowing prices slowed economic demand.
These numbers and worries of a slight recession have helped bullion rise 1.7% this week.
The CME FedWatch tool indicates a 67.8% likelihood of a 25 basis-point raise in May and rate decreases in the year’s second half.
Simpson added, “All eyes will be on U.S. retail sales, consumer sentiment and inflation expectations today,” adding that weaker data might push gold to its all-time high.
Higher interest rates reduce gold’s appeal as a hedge against inflation and economic uncertainty.
“Silver prices moved in tandem with gold,” ANZ noted.
Silver struck a one-year high at $25.90 per ounce, while platinum increased 0.5% to $1,051.93. Both metals gained for a sixth week.
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