After data indicated lessening U.S. price pressures, gold prices stayed at a month high on Friday as traders awaited speeches from multiple Federal Reserve officials.
As of 06:35 GMT, one ounce of spot gold was trading at $2,047.29, up 0.2% from Thursday's high of $2050.59, the highest level since February 2. For the second week in a row, gold was expected to rise in value. The spot price of gold in the US was $2,055.60.
The absence of unfavorable surprises in the personal consumption expenditures (PCE) report was a relief for the markets. According to City Index senior analyst Matt Simpson, gold traders were ecstatic with the yearly slowdown in core-PCE.
The consumer price index (PCE) increased 2.4% in January, according to data released on Thursday. This was the lowest annual growth since February 2021, following a 2.6% gain in December.
Progress on inflation as a whole, according to U.S. central bankers, will likely pave the way for interest rate decreases later this year. In 2024, traders are pricing in three quarter-point decreases to U.S. interest rates, according to money market pricing. The market will be on high alert later on Friday when six other Federal Reserve officials are scheduled to speak.
In February, the holdings of SPDR Gold Trust, the biggest gold-backed exchange-traded fund in the world, decreased 3.3%, and so far this year, they have fallen 6.4%.
"Whilst negative ETF flows are capping gold prices, China's central bank is a key reason that gold prices remain supported, as they were the second highest purchaser of gold reserves in the fourth quarter," said Simpson. Palladium prices soared 0.6% to $947.35 per ounce, while spot platinum prices increased 0.6% to $881.40 per ounce. Nevertheless, both metals had a second straight monthly drop, with palladium hitting a level not seen in over five years at $849.13.
Impala Platinum (IMPJ.J), a member of the Platinum Group Metals producer, has indicated that it may terminate part of its South African mining operations that are currently losing money if metal prices continue to fall and reorganization initiatives do not succeed in increasing profit margins.
Follow for more updates