Chicago Fed President Austan Goolsbee said Friday that additional reports like April’s would give him comfort the economy isn’t overheating, which may boost the case for monetary easing this year. Higher rates are typically negative for bullion, which doesn’t pay interest.
Gold has advanced about 12% this year despite the elevated inflationary environment and uncertainty over when the US central bank will reduce rates. A record-breaking rally saw the metal hit a succession of all-time highs in April, with those gains linked to strong central-bank purchases, demand from Asian markets and haven’t buying amid conflicts in Ukraine and the Middle East.
Bullion became less attractive in recent weeks on signs that the Middle East is easing away from a potential full-blown war.
However, Israel’s military has begun moving civilians out of Rafah, a possible prelude to a long-expected attack on the Gazan city. The move comes after cease-fire talks between Hamas and Israel in Cairo over the weekend apparently stalled, the main sticking point being the Iran-backed militant group’s insistence that any trick is permanent.
Spot gold climbed 0.8% to $2,319.75 an ounce at 10:46 am in London. The Bloomberg Dollar Spot Index was little changed. Silver, palladium and platinum all gained.
(By Sybilla Gross)
