Gold rebounds as investors eye US inflation data

Gold recovered part of its recent losses on Friday, with investors stepping in to buy the dip ahead of closely watched US inflation figures.

Bullion rose as much as 1.4%, following a sharp 3.2% drop in the previous session — its steepest one-day decline in a week, News.Az reports, citing Bloomberg.

The selloff coincided with volatility on Wall Street, where concerns about the impact of artificial intelligence on corporate earnings pressured multiple asset classes. The decline in gold prices may also have been exacerbated by margin calls and algorithm-driven trading.

According to Michael Ball, a macro strategist at Bloomberg, the retreat was likely intensified by commodity trading advisers who use computer models to make directional bets on prices.

Part of the recent weakness in gold and silver — the latter plunged nearly 11% on Thursday — was also attributed to profit-taking. Precious metals had rebounded after a historic rout earlier in the month, and trading conditions have remained unusually volatile. Despite the choppy moves, gold is on track to finish the week largely unchanged.

Market participants are now focused on US inflation data due later Friday, which could influence expectations for the next policy move by the Federal Reserve. Strong US jobs data released earlier this week dampened expectations for an interest rate cut by midyear. Lower interest rates typically benefit non-yielding assets such as gold.

As of 10:20 a.m. in Singapore, spot gold was up 1.1% at $4,977.44 an ounce. Silver gained 1.9% to $76.70, while platinum rose 1.4% and palladium advanced 2.2%. The Bloomberg Dollar Spot Index edged up 0.1%.

News.Az 

By Nijat Babayev