Gold prices stabilized on Friday and headed for a third straight quarterly gain after the key U.S. inflation report came in broadly in line with expectations, raising hopes that the Federal Reserve could cut rates. interest rates by September.
Spot gold was stable at $2,328.85 per ounce, as of 1335 GMT. Prices gained more than 4% in the quarter.
U.S. gold futures rose 0.1% to $2,339.60.
“We’re continuing to follow the trend of a very incremental slow decline in inflation. As a result, we’ve seen yields continue to fall, bonds continue to rise and that supports the gold market somewhat,” said David Meger , director of alternative investments and trading at High Ridge Futures.
Gold was also supported by falling U.S. Treasury yields, making the non-yielding metal more attractive to investors.
Market bets rose Friday that the Federal Reserve will cut interest rates by September and do so again in December, after a government report showed personal consumption expenditures (PCE) index inflation it did not increase at all from April to May.
Last month, PCE followed an unrevised 0.3% gain in April data as consumer spending rose modestly.
Traders are currently pricing in about a 68% chance of a rate cut in September, up from 64% before inflation data was released, according to CME tool FedWatch.
Federal Reserve Bank of San Francisco President Mary Daly, who is also a member of the 2024 Federal Open Market Committee, said the latest data showing inflation did not rise at all from April to May was “good news that the policy is working.”
Elsewhere, spot silver rose 1.1% to $29.38 and platinum gained 2.5% to $1,012.03. Both metals posted quarterly gains.
Spot palladium rose 4.5% to $970.88, but was headed for a third straight quarterly decline.
