On Thursday, gold prices rose after hints of easing US inflation and higher chances of a pause on the Federal Reserve interest rate hike.
Gold futures for August delivery went up by 0.14% to $1,964.50 per troy ounce on July 13’s Asian afternoon session. Likewise, its spot price increased by 1.30% to $1,957.32 an ounce.
In June, US consumer prices climbed slightly and recorded their smallest yearly increase over two years while inflation faded. Compared to the 3.10% forecast of analysts, the CPI jumped by 3.00% in the 12 months through June.
Gold opened $10.00 higher on the lower-than-anticipated CPI data. It hoped the July hike would be the last of the cycle. Experts said if the bullion could go over the 50-day moving average of $1,960.00, it would cause more upward bets.
After the US inflation data, the dollar fell by one percentage to over a one-year drop against significant peers. As a result, it gave gold more appeal to other currency holders.
In addition, inflation is slowing down at a favorable pace. After an expected rate hike, it eased enough to allow the Fed to be looser with the US monetary policy.
Also, markets see a 91.00% opportunity for a 25-basis point interest rate hike from the Fed later in the month. Furthermore, gold is sensitive to higher US interest rates since these affect the cost of holding non-yielding bullion.
Indian Gold Prices Jumped amid Lower Dollar
The Dollar Index (DXY) weakness, which went under the 101-mark, aided gold futures prices. Easing inflation numbers in the US lowered the greenback, helping the bullion.
It traded at 100.47, losing almost 3.00% over the last five trading sessions.
Additionally, a faster-than-expected drop in US inflation brought a rally in gold prices.
According to analysts, the yellow metal is anticipated to trade positively. However, yield volatility may serve as a risk. On the other hand, support for the bullion is estimated to be between $1,937.00 to $1,950.00. Bulls forecasted the prices to hit $1,980.00.