Home Business News Gold retreats slightly before US inflation data

Gold retreats slightly before US inflation data

12th Mar 24 12:19 pm

Gold prices were under some pressure and remained below record levels after their surge this month as traders eagerly awaited the release of the US CPI.

While the market has recorded successive days of gains as expectations continue to point to a start in interest rate cuts later this year, US inflation figures could fuel some volatility. The indicator could affect the Federal Reserve’s monetary policy direction and could impact gold’s attractiveness as well as investors’ appetite for risk.

A hotter-than-expected CPI report could potentially prompt the Federal Reserve and investors to reconsider rate cut expectations for the year. Subsequent rises in treasury yields and the U.S. dollar could weigh on gold prices. Conversely, lower-than-forecast CPI readings could help drive gold to new highs as interest rate cut expectations could increase.

At the same time, gold could continue to benefit over the longer term from central bank purchases, investors’ concerns about economic growth, and ongoing geopolitical tensions.

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