CashNews.co
Gold prices advanced in early European trading, building on overnight gains as strong US inflation data was tempered by weaker labour market readings.
At the time of writing, spot gold was up by 0.1% at $2,642.80 per ounce, while US gold futures rose 0.6% to $2,655.90.
Despite these gains, gold prices are poised to finish the week marginally lower, as investors anticipate smaller rate cuts from the Federal Reserve in the coming months.
The latest consumer price index data reinforced this expectation, but was counterbalanced by labour market figures showing a larger-than-expected rise in weekly jobless claims. This discrepancy raises the possibility of the Fed adopting a more aggressive stance on lowering borrowing costs.
In the aftermath of the economic reports, the swaps market is pricing in a 25 basis point rate cut at the Fed’s November meeting.
The economic calendar also featured commentary from Fed officials, with Chicago Fed president Austan Goolsbee indicating a preference for gradual cuts over the next 18 months, given that inflation is nearing the Fed’s 2% target.
New York Fed president John Williams echoed this sentiment during a recent appearance in Binghamton, New York, stating that the timing and pace of any future interest rate adjustments will depend on evolving data, the economic outlook, and the associated risks in achieving the Fed’s goals.