Gold prices rose to their highest level in a week on Thursday as softer U.S. economic data raised the likelihood of interest rate cuts by the Federal Reserve this year.
Spot gold was up 0.3% at $2,333.62 per ounce at 0329 GMT, after hitting its highest since June 12. U.S. gold futures were unchanged at $2,347.30.
“I still favor upward moves for the gold market given the current position of the interest rate curve, which is at the peak,” said Tim Waterer, chief market analyst at KCM Trade.
“The gold market appears content to consolidate recent gains rather than reach a higher level at this stage, at least until we see further evidence of softening US macro data, which could alter the interest rate outlook “.
Last week’s data showed moderation in labor market and pricing pressures, followed by soft retail sales data on Tuesday, suggesting economic activity remained sluggish in the second quarter.
The Fed is looking for further confirmation that inflation is cooling as it heads cautiously toward what most expect to be a rate cut or two later this year.
Lower interest rates reduce the opportunity cost of holding unprofitable bullion.
“Conflicting comments from Fed officials could generate near-term volatility. We maintain a positive view on gold with a price target of $2,500 per ounce by the end of 2024,” ANZ analysts said in a note .
The market’s immediate focus is on weekly US jobless claims data, due at 1230 GMT, and Friday’s flash Purchasing Managers’ Indexes.
Spot silver rose 1.3% to $30.13 an ounce, platinum rose 0.2% to $982.05 and palladium gained 0.4% to $908.28 .
