Gold holds near record high ahead of US inflation data release

26th March 2024 By: Bloomberg

Gold held Monday’s gain as investors remained cautious ahead of key US inflation data, which may provide traders with a firmer view on when the Federal Reserve will start cutting interest rates.

The core personal consumption expenditures index, to drop on Good Friday, is expected to show inflation probably remained uncomfortably high in February. That could hinder plans by US policymakers to implement three interest rate cuts this year. Lower borrowing costs typically benefit the precious metal, which doesn’t yield interest.

Swaps markets trimmed wagers for a rate reduction in June to 65% from 69% late last week, after Fed Bank of Atlanta President Raphael Bostic on Monday reiterated his expectation for just one cut this year. Still, gold remains near an all-time high amid building momentum surrounding the central bank’s long-awaited pivot to monetary easing.