Gold rebounded on Friday as investors awaited U.S. inflation figures for guidance on interest rate direction after jobs data lowered rate cut expectations.
Getty Images | Digital Vision| Anthony Bradshaw
Gold prices rose more than 2% on Friday as weaker than expected U.S. inflation data reignited hopes for Federal Reserve rate cuts this year, offsetting concerns from stronger than expected jobs data earlier in the week.
Spot gold was up 2.25% at $5,030.45 per ounce as of 4:01 p.m. ET. Bullion fell about 3% on Thursday, hitting its lowest in nearly a week.
U.S. gold futures for April delivery rose 2% to $5,050.80 per ounce.
“Gold, and particularly silver, is enjoying a relief rally after a mild January CPI reading eased nerves stoked by Wednesday’s strong employment report,” said Tai Wong, an independent metals trader.
CPI comes in lower than expected
Spot silver climbed 2.29% to $76.88 per ounce, snapping back from an 11% decline in the previous session.
The U.S. Consumer Price Index rose 0.2% in January, below economists’ expectations of a 0.3% increase, following an unrevised 0.3% gain in December, the Labor Department said.
Market participants currently anticipate a total of 63 basis points in rate cuts this year, with the first expected in July, according to data compiled by LSEG.
Non-yielding bullion tends to do well in low interest-rate environments.
Meanwhile, data on Wednesday showed the United States added 130,000 jobs in January, compared with analysts’ estimates of 70,000.
China’s gold demand stayed strong ahead of the Lunar New Year, while in India, the market flipped to a discount. GOL/AS
ANZ analysts raised their Q2 gold forecast to $5,800/oz from $5,400, citing its appeal as an insurance asset, while noting that silver, though still supported by strong investment demand, may see its recent outperformance fade as industrial buyers balk at higher prices.
Spot platinum rose 3% to $2,059.90 per ounce and palladium was up 4.66% at $1,692.12. Both metals were set to notch weekly losses.