Gold holds near 1-month peak

Gold prices were steady on Thursday after hitting over one-month highs, as softer US core inflation data lifted expectations that more rate cuts were still on the table, although news of a ceasefire accord between Israel and Hamas capped further gains.

Spot gold held its ground at $2,693.93 per ounce, as of 0603 GMT, after hitting its highest since Dec. 12 earlier in the session. US gold futures gained 0.2 per cent to $2,723.70.

“Easing underlying inflation in the US renewed hopes of a less-restrictive Fed policy this year. The core inflation unexpectedly slowed, while headline consumer prices showed no significant upside surprises,” said Jigar Trivedi, senior analyst at Reliance Securities.

“That supported bullion demand as progress in disinflation could prompt the FOMC to ease monetary policy, reducing the opportunity cost of holding non-yielding assets.”

The prospect of more Fed rate cuts this year heightened following the data, and interest rate futures traders on Wednesday were pricing in near-even odds that the US central bank would reduce rates twice by the end of this year, with the first reduction to come in June.

Central bank officials said the data showed US inflation was continuing to ease even as they noted heightened uncertainty in the coming months, as they await a first glimpse of the incoming Trump administration’s policies.

Potential tariffs from US President-elect Donald Trump’s incoming administration could further exacerbate inflationary pressures.