Gold Hovers Near Record And Platinum Extends Rally After CPI
The core US consumer prices index unexpectedly rose at the slowest pace since early 2021, supporting bets that the Federal Reserve will cut interest rates further
Gold traded near a record and platinum extended a breakneck rally that saw it surge close to $2,000 an ounce after softer-than-expected US inflation data.
The core US consumer prices index unexpectedly rose at the slowest pace since early 2021, supporting bets that the Federal Reserve will cut interest rates further. The Fed delivered its third straight rate cut last week — a tailwind for precious metals, which don’t pay interest — but has been ambiguous about the pace of monetary easing into 2026. Traders are assigning a roughly 25% chance of a reduction in January and almost fully pricing one by April.
Meanwhile, heightened geopolitical tensions could enhance the appeal of precious metals, and events in Venezuela, where US President Donald Trump has ordered a blockade of all sanctioned oil tankers, have also given them a boost this week.
“The direction of real yields has become more supportive,” said Dilin Wu, a research strategist at Pepperstone Group Ltd. in Australia. “Add ongoing geopolitical uncertainty and thinner year-end liquidity, and precious metals are regaining their role as portfolio stabilizers.”
Gold has jumped about two-thirds this year and is on track for its best annual performance since 1979, after a blistering rally driven by central-bank buying and inflows into gold-backed exchange traded funds.
Platinum rose for a sixth consecutive session and has more than doubled this year, set for the biggest annual gain in data compiled by Bloomberg going back to 1987.
The surge has come as the London market shows signs of tightening, with banks parking metal in the US to insure against the risk of tariffs. Exports to China have also been robust this year, and optimism for the nation’s demand has been bolstered as futures recently began trading on the Guangzhou Futures Exchange.
Open interest and trading volumes have surged in Guangzhou for the nearest contract in June, while prices on the exchange have risen well above other international benchmarks, adding fuel to the global rally.
Gold was little changed at $4,331.05 an ounce as of 4:40 p.m. in New York. Platinum rose 1% to $1,928.39, having earlier hit the highest since 2008. Silver inched lower, while palladium rose. The Bloomberg Dollar Spot Index edged down 0.01%.
