The price of gold rose to its highest level in a week on Thursday as softer U.S. economic data raised the likelihood that the Federal Reserve will cut interest rates this year.
Spot gold rose 0.3% to $2,333.62 per ounce by 0329 GMT, having earlier hit its highest level since June 12. U.S. gold futures were unchanged at $2,347.30.
“I continue to favor upward moves for the gold market in light of where we are currently on the interest rate curve, which is at the peak,” said Tim Waterer, chief market analyst at KCM Trade.
“The gold market appears content to consolidate recent gains rather than reach higher levels at the moment, at least until we see some further evidence of softening US macroeconomic data, which could alter the outlook for the interest rates.”
Last week’s data showed a moderation in labor market and price pressures, followed by weak retail sales data on Tuesday, suggesting economic activity remained lackluster in the second quarter.
The Federal Reserve is seeking further confirmation that inflation is cooling as it cautiously heads toward what most expect to be a rate cut or two later this year.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
“Mixed comments from Fed officials could inject near-term volatility. We maintain a positive view on gold with a price target of $2,500 per ounce by the end of 2024,” ANZ analysts said in a note.
Immediate market attention is focused on weekly US jobless claims data due at 1230 GMT, as well as Friday’s flash purchasing managers’ indices.
Spot silver rose 1.3% to $30.13 an ounce, platinum rose 0.2% to $982.05 and palladium gained 0.4% to $908.28.
