Gold on track for weekly loss after hot US inflation data

Gold prices rose mildly in European trade on Friday as US treasury yields stalled, however, the precious metal is on track for the first weekly loss in a month on hot US inflation data. 

US consumer and producer prices data were above estimates, in turn hurting the odds of early US interest rate cuts this year.

Gold Prices Today 

Gold prices rose 0.35% to $2170 an ounce, with a session-low at $2160, after losing 0.55% on Thursday, the second loss in three days following bullish US data data. 

Weekly Trading

Gold prices are down 0.5% so far this week on track for the first weekly loss in a month on profit-taking off a record high at $2195. 

US Yields

US 10-year treasury yields declined 0.5% on Friday off two-week highs at 4.300% on profit-taking, in turn offering support for non-yielding assets. 

The yields surged on Thursday by the most amount since February 13 following strong US producer prices data. 

US inflation data released this week showcased the ongoing inflationary pressures on Fed policymakers and bolstered the case for maintaining interest rates for an extended duration this year.

Hot US Inflation 

Recent data showed US consumer prices rose 3.2% y/y in February, above estimates of 3.1%.

Core prices rose 3.8% in February, above estimates of 3.7%. 

Producer prices rose 1.6% in February, up from 1% in January, marking the fastest increase since September 2023. 

On a monthly basis, producer prices rose 0.6% last month, up from 0.3% in January. 

US Rate Prospects

Following the data, the odds for a 0.25% Fed interest rate cut in May fell to 12%, while the odds for such a cut in June fell to 60%. 

Traders are still pricing in 75 basis points of interest rate cuts by the Federal Reserve this year. 

The SPDR

Gold holdings at the SPDR Gold Trust remained flat yesterday at 816.86 tonnes.