Gold hovers near one-month peak on slowing US inflation

US gold futures were flat at $2,053.00.

”Markets were relieved that there were no nasty surprises in the personal consumption expenditures (PCE) report. Gold traders rejoiced the fact that core-PCE slowed annually,” City Index senior analyst Matt Simpson said.

Data showed on Thursday PCE inflation in January rose 2.4%, the smallest annual increase since February 2021, after a 2.6% advance in December.

Receding inflationary pressures have helped the Fed to set the table for rate cuts likely later this year. Lower rates boost the appeal of non-yielding bullion.

Money market pricing shows traders are pricing in three quarter-point US rate cuts for 2024.

Investors will watch out for remarks from at least six more Fed officials due later on Friday.

The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust’s holdings fell 3.3% in February and 6.4% so far this year.

”Whilst negative ETF flows are capping gold prices, China’s central bank is a key reason that gold prices remain supported, as they were the second highest purchaser of gold reserves in the fourth quarter,” Simpson said.

Spot platinum fell 0.2% to $871.06 per ounce, and palladium dropped 0.3% to $939.12. Both posted a second monthly decline, with palladium touching more than five-year lows of $849.13.

Platinum group metals producer Impala Platinum said it could shut some of its loss-making South African mining operations if metal prices deteriorate further and restructuring efforts fail to improve margins.

Spot silver fell 0.4% to $22.59 per ounce.