Gold prices stagnate ahead of US inflation data
Will U.S. inflation influence Fed policy? Experts disagree

Gold prices traded in a narrow range on Wednesday as traders awaited the release of U.S. inflation data, which was expected later in the day and could have implications for Federal Reserve policy. Spot gold was down 0.1% at $2,031.43 per ounce, while U.S. gold futures were down 0.2% at $2,038.20. Core consumer prices are expected to rise 5.5% in April from a year earlier, according to economists surveyed.
If U.S. inflation remains moderately controlled, this could lead to a pause in the Fed's rate hike, which would weaken the dollar and support gold, said Hareesh V, head of research at Geojit Financial Services. Currently, markets are expecting an 83% probability that the U.S. Federal Reserve will keep interest rates at current levels in June.
Although gold is considered a hedge against inflation, rising interest rates dampen the appeal of the non-yielding bullion. The weak outlook for the U.S. currency and yields renews gold's safe-haven status, Hareesh said. "Concerns about the global economy and demand-supply outlook could also support the commodity in the near term," he added.
Investors are also closely watching developments around the U.S. debt ceiling. President Joe Biden and top policymakers agreed Tuesday to further talks aimed at breaking the deadlock on raising the $31.4 trillion U.S. debt ceiling, just three weeks before the country may be forced into an unprecedented default.
According to technical analyste, spot gold prices could retrace in the range of $2,019 to $2,024 per ounce. The spot price of silver fell 0.2% to US$25.58 per ounce, platinum gained 0.1% to US$1,106.11, while palladium fell 0.2% to US$1,566.85.
