By Joe Hoppe
Gold rose over the week on renewed hopes for Federal Reserve interest-rate cuts, after U.S. inflation eased slightly in April in line with expectations.
At 0958 GMT, June gold futures on the New York Mercantile Exchange were up 0.1% at $2,388.4 a troy ounce. Futures reached the highest point since April 22 on Thursday with $2,402.7, and are up 0.5% on week.
The bullion hit an all-time high last month, at $2,448.8 an ounce on April 12, in a rally underpinned by strong demand from central banks and geopolitical tensions, before tumbling again.
Softer U.S. Consumer Price Index data on Wednesday brought some relief to the precious metal, after three consecutive months of upside inflation surprises hit hopes for Federal Reserve interest-rate cuts. Gold prices are typically inversely related to interest rates; higher rates for longer diminish the appeal of noninterest bearing bullion.
Once the rate cut cycle eventually begins later this year, gold will likely see renewed demand from ETF investors, Saxo Bank's head of commodity strategy Ole Hansen said in a note. Many of these investors have been net sellers, or people who have generally overall sold more gold than bought, since 2022 when the interest-rate cycle started, he said.
"While the buy-on-dip interest will support the gold market, the question is whether the current momentum is strong enough to force prices higher to a fresh record," Hansen said.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
05-17-24 0621ET
