Gold Holds Gains as Traders Digest Data, Await Inflation Print

(Bloomberg) -- Gold held gains as traders assessed the latest US data while awaiting a key inflation gauge that may shed more light on the path of the Federal Reserve’s interest-rate policy.

Gross domestic product rose at a 3% annualized rate during the April-June period, up from the previous estimate of 2.8%. The economy’s main growth engine — personal spending — advanced 2.9%, versus the prior estimate of 2.3%. A separate government report out Thursday showed initial applications for unemployment benefits were little changed.

Treasury yields and the dollar rose after the print, and bullion gave up the advances made earlier in the day before rebounding.

Investors are eyeing the Fed’s preferred inflation gauge, which is due Friday. The numbers are expected to show the core personal consumption expenditures price index is now a smidgen above the central bank’s 2% goal.

Gold’s gains this year have been supported by expectations that the US central bank is poised to lower borrowing costs, which typically aids bullion as it doesn’t pay interest. Strong over-the-counter demand and geopolitical tensions in the Middle East and Ukraine also helped the advance.

Fed Chair Jerome Powell said last week that the “time has come” to ease interest rates, although other officials including Fed Bank of Atlanta President Raphael Bostic have struck a slightly more cautious tone.  

Spot gold rose 0.8% to $2,523.97 an ounce as of 11:09 a.m. in New York after peaking at $2,531.75 last week. The Bloomberg Dollar Spot Index was up 0.3%, though on course for its third monthly loss in four. Silver, platinum and palladium all advanced.

--With assistance from Sybilla Gross and Yvonne Yue Li.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.