Gold prices experienced a modest uptick on Thursday, building upon a significant surge in the previous session. This movement also came against a backdrop of a weakening dollar and declining bond yields, spurred by expectations of interest rate cuts by the U.S. Federal Reserve as early as September.
Spot gold saw a 0.25 percent increase to $2,391.88 per ounce, as of 5:17 GMT, after rising over 1 percent to its highest since April 19 on Wednesday. Meanwhile, U.S. gold futures saw a 0.07 percent rise to $2,396.55.
Cooling inflation supports gold prices
Expectations of an interest rate cut in September led to a 0.2 percent decline in the dollar, making greenback-priced bullion less expensive for other currency holders. Moreover, the benchmark 10-year Treasury yield declined to its lowest in over a month.
U.S. consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend. This has raised expectations of an interest rate cut soon, which supports gold prices. However, a recovery in the dollar and Treasury yields could impact the rise of gold prices this week.
Declining inflation, softer U.S. payrolls and a lackluster jobs report in April signal a recovering economy for policymakers and the Fed. The central bank now awaits continuous progress on inflation before cutting rates.
Read: Oil prices rise amid weaker dollar, tighter supply expectations
Other precious metals
While gold prices remain a primary focus, other precious metals experienced varied movements. Spot silver saw a decline of 0.31 percent, reaching $29.61 per ounce, while palladium saw a 0.08 percent decline to $1,008.87. Notably, platinum exhibited a more substantial increase of 0.7 percent, reaching $1,071.25, marking its highest level since May 22, 2023.
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