US PCE price index data due on Friday
Gold jumped over 1% earlier in the session, just below record highs
Recasts as of 1358 GMT
By Anjana Anil
March 26 (Reuters) –Gold prices climbed on Tuesday, buoyed by a weaker US dollar, while investors waited for data due later in the week to reveal underlying inflation trends that will help gauge the Federal Reserve’s interest-rate stance.
Spot gold XAU= rose 0.5%, to $2,182.77 per ounce, by 09:58 am EDT (1358 GMT), having jumped as much as 1.3% earlier in the session. US gold futures GCcv1 for April delivery rose 0.3%, to $2,183.00.
The dollar index =USD slipped 0.1%, making gold cheaper for overseas buyers.
“Closer to the summer, you’re going to see gold go higher just with the expectation of rate cuts, unless the Fed changes stance or makes some announcement that they’re taking cuts off the table, which I don’t see them doing at this point,” said Bob Haberkorn, senior market strategist at RJO Futures.
Market focus is on the US Core Personal Consumption Expenditure Price Index data PCE due on Friday. FRX/
“If the (PCE) numbers are higher than expected, then gold will probably pull back, but I expect those dips to be brought up fairly quickly,” Haberkorn said.
Market reaction to the data may only be seen next week, on account of the Good Friday holiday.
Non-yielding bullion logged a record high or $2,222.39 last week after Fed policymakers indicated that they still expected to cut rates by three-quarters of a percentage point by end-2024.
Gold prices also continue to find support from elevated physical demand from Chinese households, where gold’s record rally has not tarnished the buying appetite. GOL/AS
Central bank purchases also sustain their support for gold, with China’s central bank steadily building its gold reserves.
“The motivating factor for their gold purchases is diversification away from the G7 currencies, after these currencies were weaponized in 2022 following the (Russia-)Ukraine war,” said Nitesh Shah, commodity strategist at WisdomTree.
Spot silver XAG= fell 0.4%, to $24.57, platinum XPT= gained 0.2%, to $904.62, while palladium XPD= loses 0.2%, to $1,002.41.
Reporting by Anjana Anil in Bengaluru and Polina Devitt in London; Editing by Pooja Desai
