Gold prices steady after US inflation rises

Gold prices stabilized today, Wednesday, after recording their largest decline in a month in the previous session, as rising inflation in the United States raised concerns that the Federal Reserve (the US central bank) may postpone moving forward with reducing interest rates until after June.

According to Reuters, gold rose in spot transactions 0.1% to $2,158.70 per ounce by 0759 GMT. US gold futures fell 0.1% to $2,164.80.

Michael Langford, chief investment officer at Scorpion Minerals, said that the recent decline in gold prices comes at a time when everything depends on inflation data, which feeds the decision-making process of the US Federal Reserve.

Langford expects gold prices to increase by about 10%.

Gold fell 1.1% on Tuesday, after data showed US consumer prices rose strongly in February, exceeding expectations and indicating some continued rise in inflation. This was gold’s worst single-day decline since February 13, when data showed that consumer prices also increased more than expected in January.

According to the interest rate probability application of the London Stock Exchange Group, traders have slightly reduced their hopes for a reduction in interest rates in June, as they see a chance of about 67% that the reduction will begin beginning in June, down from 72% yesterday, Tuesday, before the data.

Langford said there was an excess amount of money in the system and there was an influx of money into commodities, keeping base metals as well as gold supportive so far.

The inflation reading in the United States pushed US Treasury yields and the dollar higher. The 10-year Treasury yield received additional support after weak demand at an auction of $39 billion of the benchmark bond.

Meanwhile, markets also continued to monitor Ukraine’s attacks on Russian energy infrastructure, which prompted President Vladimir Putin to warn the West that it was prepared for nuclear war.

Platinum rose in spot transactions 0.3 percent to $926.59 per ounce, palladium gained 0.1 percent to $1,042.25, and the price of silver stabilized at $24.17.