Gold prices gain for the fourth month in a row

Gold prices fell during trading on Friday, May 31, at settlement, as investors absorbed the US inflation report, which was largely in line with estimates, although expectations that the US Federal Reserve would reduce interest rates this year kept the metal on track to achieve its fourth monthly gain. respectively.

Spot gold gave up previous gains to trade 0.7% lower at $2,325.67 an ounce. US gold futures settled 0.9% lower at $2,346.4.

However, gold rose by 1.8% during the month of May, according to CNBC, and on May 20, prices reached an all-time high of $2,449.89 per ounce.

“Gold fell despite the PCE report and weak consumer spending, which could indicate near-term exhaustion,” New York-based independent metals trader Tai Wong said.

The data showed that the personal consumption expenditures price index rose 0.3% in April, in line with expectations of economists polled by Reuters. On an annual basis, the inflation rate in personal consumption expenditures in April stabilized at 2.7%, as was expected and the rate in March.

“Many Fed governors have said it will take a few months of lower inflation to convince them it is safe to cut interest rates,” Wong said.

Traders on Friday added to bets that the US Federal Reserve will cut interest rates for the first time in September after a US Commerce Department report showed that inflation may have made slight progress towards the Fed’s 2% target last month.

The head of the US Federal Reserve in Dallas, Lori Logan, said on Thursday, May 30, that she believes that inflation is still heading towards the Fed’s target of 2%, but indicated that it is too early to think about lowering interest rates.

While gold is often considered an insurance against inflation, rising interest rates increase the opportunity cost of holding non-yielding assets.

Silver fell in spot transactions by 2.9% to $30.28 per ounce, but recorded its largest monthly gain since November 2022.

Platinum rose 1.2% to $1,036.44, and palladium fell 4.5% to $905.24 per ounce.