“Gold Prices Turn Upward Following Inflation Data and Fed’s Monetary Policy – Investing.com Update”

Investing.com – Updated at 12:45 PM GMT

Gold prices turned upward after it was on a downward path, as it benefited from inflation data a while ago that supports the Fed’s calmness in its monetary policy for the coming period, given that the data shows a slowdown in the rise in consumer prices.

The consumer price index recorded for April, on an annual basis, 4.9%, while experts expected it to record an increase of 5.0%, as recorded in the previous data. While the consumer price index recorded for April, on a monthly basis, 0.4%, while experts expected it to grow by 0.4%, after growing by only 0.1% in March.

The core consumer price index (excluding food and energy) recorded a year-on-year growth of 5.5%, while experts expected it to grow by 5.5%, after it grew by 5.6% according to March data. While the basic consumer price index (excluding food and energy) recorded on a monthly basis a growth of 0.4%, while experts expected it to record 0.4% as recorded in March.

Futures are now up 0.6% at $2,055 an ounce.

While spot contracts rose by 0.65% to $2048 an ounce.

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Gold prices fell on Wednesday as investors braced for key US inflation data due later in the day, which could affect the Federal Reserve’s monetary policy stance.

US CPI data is due at 12:30 GMT. Economists expect a 5 percent year-on-year rise in core consumer prices for the month of April, the same reading as in March.

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Gold and the dollar now

It fell to 2037 dollars an ounce, by 0.25%.

It fell by 0.19% at $2030 an ounce.

While it settles without a noticeable increase or decrease at 101.40 points.

gold upon settlement

Gold prices rose when trading settled, yesterday, Tuesday, hours before the expected inflation data.

Upon settlement, gold futures rose 0.5%, or $9.7, to reach $2,042.9 an ounce.

Weakness of the dollar.. and support for gold

Harish said. Head of Commodities Research at Geojit Financial Services, said that if US inflation remains moderately controlled, it could lead to a pause in the Fed’s rate hikes, which would weaken the dollar and support gold.

Markets are currently pricing in an 83% chance of keeping rates at their current level at the next Fed meeting in June, but it all depends on upcoming data as the Fed members explained.

On Tuesday, Fed Governor Philip Jefferson said the US economy is slowing in a “systematic fashion”, while New York Fed President John Williams said it was too early to say whether the central bank had finished raising interest rates.

Although gold is considered a hedge against inflation, higher interest rates reduce the attractiveness of non-yielding bullion.

Harish said that the weak outlook for the US currency and bonds supports the safe-haven status of gold.

He added: “Concerns about the global economy and the outlook for supply and demand may support the yellow metal in the near term.”

Evolution of the debt ceiling crisis

Investors are also closely watching developments surrounding the US debt ceiling.

President Joe Biden and top lawmakers agreed on Tuesday to hold further talks aimed at breaking the deadlock over raising the $31.4 trillion U.S. debt limit, just three weeks before the country is forced into an unprecedented default.

Yesterday, Tuesday, Biden indicated that the United States’ default on its debt is “not an option,” after a meeting he held on this file with congressional leaders.

While Republican US House Speaker Kevin McCarthy announced that no agreement had been reached in a meeting with President Joe Biden on the crisis of raising the public debt ceiling for the United States.

He pointed out that the parties agreed to hold a new meeting on Friday to discuss the thorny file.

There is no agreement between the Democratic and Republican parties to raise the ceiling of the public debt of the United States, noting that something requires legislation that requires the Republicans to proceed with the reduction of the budget.

The optimal strategy for gold trading.. speculation or investment?

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