Gold prices fall as traders scrutinize US data for Fed cues

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Gold prices fall as traders scrutinize US data for Fed cues

Gold prices edged lower on Wednesday ahead of the release of key US inflation data that could provide insight into the Federal Reserve’s interest rate path.

FUNDAMENTALS

* Spot gold was down 0.1% at $2,355.24 an ounce at 0101 GMT. Bullion prices rose 1% on Tuesday.

* US gold futures were flat at $2,361.10.

* Markets’ attention will be focused on US Consumer Price Index (CPI) data due at 12:30 GMT.

* U.S. producer prices rose more than expected in April amid sharp increases in the costs of services and goods, indicating that inflation remained high at the start of the second quarter. * At the same time, Fed Chairman Jerome Powell said he expects US inflation to continue falling through 2024 as it did last year and noted that the Fed was unlikely to be forced to raise interest rates again. * Federal Reserve Bank of Cleveland President Loretta Mester said it was appropriate for the Fed to keep rates steady while awaiting evidence that price pressures are easing further. * Lower interest rates reduce the opportunity cost of holding non-yielding gold.

* BHP Group’s Australian-listed shares rose 2.3% on Wednesday after its takeover target, Anglo American, announced a split plan to defend against a $43 billion bid.

* Asian markets are expected to open optimistically as falling U.S. bond yields and a weak dollar reflect expectations that the Fed will cut interest rates as early as September, but the apparent calm could be shattered in a flash.

* Spot silver fell 0.2% to $28.52 an ounce, platinum rose 1.6% to $1,047.73 and palladium gained 0.9 to $986.15 .

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