Gold prices climb as Middle East tensions rise, US inflation eases
GOLD prices rose on Thursday, as rising Middle East tensions boosted demand for safe-haven assets, while softer-than-expected US inflation data raised expectations of potential interest rate cuts by the Federal Reserve.
Spot gold was up 0.3 per cent at US$3,364.10 an ounce, as of 0017 GMT. US gold futures gained 1.2 per cent to US$3,384.40.
The US dollar index edged 0.1 per cent lower, making greenback-priced bullion less expensive for overseas buyers.
Gold prices gained as investors sought safe-haven assets amid rising geopolitical uncertainty sparked by US President Donald Trump's comments that US personnel were being relocated from the Middle East due to heightened risks.
The US data prompted renewed calls from Trump for the Fed to implement significant rate cuts.
Data showed the Consumer Price Index rose 0.1 per cent in May, below economists' expectations of 0.2 per cent, as lower petrol prices partially offset increases in rent. However, inflation is expected to accelerate in the coming months due to import tariffs imposed by the Trump administration.
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Traders now expect a 50-basis-point rate cut by the year-end, with market participants awaiting US producer price index data, due at 1230 GMT, for additional signals on the Fed's policy path ahead of its June 17-18 meeting.
Meanwhile, Trump said on Wednesday that a deal to restore a fragile truce in the US-China trade war had been reached after negotiators from Washington and Beijing agreed on a framework covering tariff rates.
Trump added that he would be willing to extend a July 8 deadline for completing trade talks with other countries before higher US tariffs take effect but did not believe that would be necessary.
Elsewhere, spot silver was up 0.3 per cent at US$36.32 per ounce, platinum rose 0.8 per cent to US$1,265.32, still hovering near more than a four-year high, while palladium was down 1 per cent at US$1,069.65. REUTERS
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