(Bloomberg) — Gold extended gains after US core inflation data met expectations, keeping open the possibility of interest-rate cuts later in the year.
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Bullion closed at the highest price since early February after the reading Thursday, and edged up further on Friday.
Although underlying inflation is running at the fastest pace in almost a year, the print wasn’t a surprise and failed to dent the broader disinflationary trend underpinning forecasts for policy easing. Lower interest rates tend to benefit non-yielding gold.
Prices for the metal swung in February, dipping below $2,000 an ounce mid-month then recovering in line with expectations for a Federal Reserve pivot. On Thursday, Fed Bank of San Francisco President Mary Daly said officials are ready to lower rates as needed, but emphasized there’s no urgency given the strength of the economy.
Spot gold climbed 0.3% to $2,050.89 an ounce at 10:32 a.m. in London. The Bloomberg Dollar Spot Index was little changed. Silver, platinum and palladium all headed for weekly declines.
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