NEW YORK: Gold prices reversed course and edged higher on Thursday after a US inflation reading came largely in line with expectations, easing some concerns about imminent Federal Reserve rate hikes and pushing the dollar and Treasury yields lower.
Spot gold was up 0.2 percent at USD4,007.65 an ounce as of 11:12 a.m. EDT (1512 GMT) after falling as much as 1 percent earlier in the session.
US gold futures for August delivery rose 0.3 percent to USD4,021.00 per oz.
“PCE data looks like it came in line mostly with expectations. At this point, it’s part of the reason why gold is relatively level-headed today,” said David Meger, director of metals trading at High Ridge Futures.
The US personal consumption expenditures price index surged 4.1 percent in the 12 months through May, the largest increase and first reading above 4.0 percent since April 2023. Economists polled by Reuters had forecast PCE inflation advancing 4.1 percent.
The US dollar erased gains to turn lower after the data, making greenback-priced bullion cheaper for overseas merchants. Treasury yields also edged lower.
Markets project an 80 percent chance of a rate hike in December, compared with an 85 percent chance before the release of the PCE data and a 61 percent chance before the Fed’s policy statement last week, the CME FedWatch data showed.
“The main focal point will still remain inflationary pressures moving forward. That’s some of the reason why we’ve seen gold deteriorate over the course of the last several sessions,” Meger added.
Gold prices fell below the USD4,000-an-ounce mark on Wednesday for the first time since November 2025, pressured by ramped-up expectations of higher interest rates this year after the US Federal Reserve struck a hawkish tone at its policy meeting last week.
Despite serving as an inflation hedge, higher interest rates dampen bullion’s appeal as investors turn to yield-bearing assets.
Meanwhile, oil prices fell to pre-war levels, as expectations of more supply from the Middle East outweighed demand concerns as an accord reached last week to end the Iran war has allowed the resumption of traffic through the strait.
Spot silver added 0.4 percent to USD57.65 per ounce and platinum climbed 0.9 percent to USD1,593.15. Palladium rose 1 percent to USD1,177.73.
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