At the moment, the market is sensitive to the economic growth risks following the disappointing PMI data in the USA over the past week, and any PCE results exceeding expectations indicate a lack of Fed rate cuts in the near future, which could negatively impact gold. This sentiment was expressed by Spivak.
Gold is considered a hedge against political risks and inflation; however, rising interest rates reduce the attractiveness of this non-yielding asset. Silver remained stable at the level of $31.84 per ounce, platinum fell by 0.1% to $964.95, and palladium decreased by 0.1% to $926.03. Futures on gold in the USA dropped by 0.1% to $2,927.20.
The dollar index increased by 0.2% against competitors, distancing itself from the recent 11-week lows, as vague statements from President Donald Trump regarding tariffs on Europe and further delays in the introduction of tariffs on Canada and Mexico fueled uncertainty.
The yield on U.S. Treasury bonds reversed their 10-year trend after the previous drop, which makes non-yielding gold less attractive. Gold slightly dipped on Thursday due to the strengthening of the US dollar and increasing yields of Treasury bonds, while investors awaited a key inflation report to assess the Federal Reserve's actions.
According to Ilya Spivak, an analyst at the investment platform Tastylive, the slight increase in the dollar and the yields of Treasury bonds suggest some pressure on gold this session, adding that the overall rising trend for gold remains intact.
Several members of the Fed should speak later in the day to provide more detailed information on the monetary policy easing this year. Markets in the next address will look at the Personal Consumption Expenditures (PCE) index, the key inflation indicator for the Federal Reserve, which is expected to be released on Friday to get additional confirmation regarding rate paths of the Fed.
According to a Reuters poll, the monthly PCE index is projected at 0.3%, unchanged compared to December, while the corrected figure is expected to rise by 0.3%, up from 0.2% in December.
