10 gram 22-carat, gold

Gold prices stabilize as investors await U.S. inflation data

Gold prices held steady on Friday as investors waited for the mixed signal from U.S. Federal Reserve (Fed/FED) officials to raise interest rates this week and announce U.S. inflation data later today.

As of 0104 GMT, spot gold was flat at US$1,773.52 per ounce. So far this week, prices have increased by 0.6%.

U.S. gold futures fell 0.2% to US$1,773.60 per ounce.

The dollar index was little changed against a basket of currencies, at 91.839, staying below the two-month high of 92.408 touched last week.

On Thursday, two Fed officials warned that the recent increase in inflation might exceed policymakers’ expectations. Other Fed policymakers said that after losing their jobs during the pandemic, employment needs more improvement.

Statistics show that the labor market has steadily recovered from the pandemic as the economy reopened. Thus, fewer Americans filed new applications for unemployment benefits last week.

New orders for primary capital goods made in the United States unexpectedly fell in May. It may be affected by shortages of certain products. Still, the steady increase in shipments indicates that corporate spending remains strong in the second quarter.

Investors are now looking at Friday’s U.S. producer price data for further clues about rising inflation

 U.S. non-agricultural employment data will be released next week.

The Bank of England stated that with the reopening of the British economy, the inflation rate would exceed 3%. Still, further higher than 2% target is only “temporary.” Most policymakers tend to keep the stimulus plan running at full speed.

Some investors see gold as a hedge against higher inflation that may occur after stimulus measures.

SPDR Gold Trust, the world’s largest listed gold trading fund, said its holdings fell by 0.4% to 1,042.87 tons on Thursday.

Silver held steady at US$25.87 per ounce, while palladium fell 0.1% to US$2,614.04. Platinum rose 0.5% to US$1,089.

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