PRECIOUS-Gold rebounds to 2-week peak as US data boosts Fed rate cut hopes

* SPDR Gold holdings rise zero.5% on Wednesday

* Palladium hits a peak since Might 1 at $1,380.75/oz

* Core PCE worth index revised sharply decrease (Updates costs)

By Eileen Soreng

Might 30 (Reuters) – Gold shook off headwinds from a stronger greenback to scale a close to two-week peak on Thursday as information pointed to easing inflationary strain in the USA, boosting expectations of an extra rate of interest minimize by the Federal Reserve.

Spot gold gained zero.7% to $1,288.03 per ounce by 2:13 p.m. ET (1813 GMT), having hit a excessive of $1,288.87 earlier, its highest degree since Might 17.

The metallic reversed course from earlier within the session, when it fell to its lowest degree since Might 23 at $1,274.44.

U.S. gold futures settled zero.5% greater at $1,287.1 an oz..

Whereas information confirmed robust development in gross home product within the first quarter, a gauge of inflation tracked by the Fed elevated at a price final quarter, as an alternative of the beforehand reported 1.three% tempo. Manufacturing, retail gross sales, housing and exports additionally dropped in April.

Fed policymakers are prone to shrug off the final quarter’s development spurt and give attention to the weak home demand and inflation once they meet subsequent month.

“The core PCE (private consumption expenditures) got here in weaker than anticipated and helps gold on the margin because it reaffirms this market’s perception that the following transfer from the Fed is a minimize, which tends to decrease the chance value for holding non-cash circulate yielding property like gold,” stated Daniel Ghali, commodity strategist at TD Securities.

Gold additionally shrugged off preliminary strain from a stronger greenback, with the U.S. unit hovering inside putting distance of a two-year excessive in opposition to a basket of main currencies.

“Gold has held up so much higher than anticipated with the latest energy within the greenback and that’s a significant feather within the cap of the gold market within the close to time period,” stated John Caruso, senior market strategist at RJO Futures.

The greenback has been used as the popular hedge in opposition to commerce tensions, repeating a development seen final 12 months.

“Quick-term resistances (for gold) to look at embrace $1,280, $1,285 and $1,293, ranges which have been beforehand assist. We might solely flip bullish once more on gold ought to it rise again above that $1,300 hurdle and keep above it, or print a bullish reversal at decrease ranges first,” Fawad Razaqzada, market analyst with Foreign, wrote in a word.

In the meantime, holdings of SPDR Gold Belief, the world’s largest gold-backed exchange-traded fund, rose zero.5% to 740.86 tonnes on Wednesday.

Elsewhere, silver rose zero.7% to $14.52 per ounce.

Platinum was up zero.6% at $796.25 per ounce, after falling to its lowest degree since Feb. 15 at $784.42.

Palladium climbed 1.three% to $1,366.51 per ounce, having touched a peak since Might 1 at $1,380.75. (Reporting by Eileen Soreng in Bengaluru Enhancing by Diane Craft and Matthew Lewis)

Our Requirements:The Thomson Reuters Belief Ideas.

Product categories