Gold Prices Surge Amid US Inflation Data Boost

Gold prices increased by more than 1%, driven by weaker-than-expected US inflation data and anticipation of Federal Reserve rate cuts. Spot gold rose 1.5%, and US gold futures increased 1.3%. Meanwhile, the US Consumer Price Index grew 0.2% in January. Positive employment figures were reported, impacting market dynamics.

Gold prices have climbed by over 1% due to weaker-than-anticipated US inflation data, bolstering market hopes for Federal Reserve rate cuts this year. This rise offsets earlier concerns from stronger-than-expected employment figures earlier in the week. As of 09:12 a.m. ET, spot gold stood at $4,992.27 per ounce, marking a weekly increase of 0.6%, despite Thursday's 3% drop.

In tandem, US gold futures for April delivery went up by 1.3% to $5,013.60 per ounce. Tai Wong, an independent metals trader, attributed the boost to a mild Consumer Price Index (CPI) reading, which helped calm nerves eased by robust employment data. Spot silver also gained 2.7% to $78.72 per ounce, recovering from an 11% decline.

Market participants now expect 63 basis points in rate cuts by the year's end, with the first anticipated in July. Data on Wednesday revealed that the US added 130,000 jobs in January, surpassing the forecast of 70,000. This data, alongside strong gold demand in China, has influenced the market, pushing ANZ analysts to raise their Q2 gold forecast to $5,800 per ounce.