Gold Prices Climb To Four-Week Peak

Gold prices climbed to their highest in about a month on Thursday on a weaker dollar after US inflation data raised investor hopes that the Federal Reserve would soon stop tightening its monetary policy.

Spot gold was up 0.1% at $1,958.99 per ounce by 1040 GMT, its highest since June 16. U.S. gold futures also rose 0.1% to $1,962.90.

The dollar slid to its lowest in more than a year, making bullion more affordable to holders of other currencies. Benchmark US yields were also at their lowest in more than a week, cutting the opportunity cost of holding non-yielding gold.

With two weeks left before the Fed’s next meeting, and data showing fewer jobs being added and inflation slowing in June, there are expectations that the next rate hike could be the last, Carlo Alberto De Casa, external analyst at Kinesis Money, said.

U.S. consumer prices rose modestly in June, registering their smallest annual increase in more than two years as inflation continued to subside.

Investors’ focus turns on Thursday to initial jobless claims data for the week to July 8 – which is expected to deliver a reading of 250,000 versus 248,000 the prior week – and June’s producer price index data.

Additionally, markets will parse remarks by Fed Board Governor Christopher Waller to gauge the central bank’s tone on monetary policy tightening.

“If, in the coming year, a further decline in inflation and the weakness of the economy even make rate cuts more likely, gold should head for its all-time high,” said Commerzbank analysts in a note.

In the wider markets, European shares gained, yet weak trade data from China kept a lid on sentiment. Most base metals rose.

Among other precious metals, spot silver rose 0.5% to $24.27 per ounce, platinum was up 1.7% to $962.25, and palladium gained 1.1% to $1,296.92.