NEW YORK: Gold steadied on Thursday, hovering near its one-month peak, after as-expected US inflation and weaker jobs numbers reinforced expectations that the Federal Reserve will keep interest rates on hold this year.
Spot gold was steady at $1,941.69 per ounce at 12:16 p.m. EDT (1616 GMT), close to its highest since Aug. 2, at $1,948.79, hit on Wednesday.
US gold futures fell 0.2% to $1,968.40.
US inflation as measured by the personal consumption expenditures (PCE) price index rose 0.2% last month, matching June’s gain. In the 12 months through July, the PCE price index increased 3.3%, after advancing 3.0% in June.
US consumer spending, which accounts for more than two-thirds of the country’s economic activity, accelerated in July.
Weekly initial jobless claims fell 4,000 to 228,000. That compares with a four week average of 237,500.
Bob Haberkorn, senior market strategist at RJO Futures said that while the numbers were “not terrible”, they were “not great” either and may mean that the US Federal Reserve would be in a position to halt interest rate rises early next year.
Gold is now in wait-and-watch mode, and a drop in bond yields could prompt some strength in bullion, Haberkorn added.
US Treasury yields and the dollar index ticked up, after briefly trimming their gains following the economic data, making non-yielding bullion less attractive. Bets on the Fed leaving rates unchanged in September stood at 88.5%, while bets of a pause in November were at 51%, according to the CME Group’s FedWatch tool.
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