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Gold prices advance for third consecutive session
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Markets pricing in Fed 25-bp rate hike in May
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Gold might retest resistance at $2,032/oz - technicals
(Updates prices)
By Kavya Guduru
April 13 (Reuters) - Gold prices rose for a third
consecutive session on Thursday, as softer-than-expected U.S.
inflation data prompted bets that the Federal Reserve might
raise rates just once more before pausing.
Spot gold was up 0.3% at $2,020.52 per ounce, as of
0700 GMT. U.S. gold futures rose 0.5% to $2,035.20.
Gold prices rose over 1% on Wednesday after data showed the
U.S. Consumer Price Index (CPI) rose 0.1% last month, compared
with expectations of a 0.2% increase, after advancing 0.4% in
February.
"Expectations that the Fed's hiking cycle may be nearing its
end are well-anchored by the recent U.S. CPI data, with lower
Treasury yields and a weaker dollar being supportive of gold
prices," said Yeap Jun Rong, a market analyst at IG. The CME FedWatch tool shows markets are pricing in a 66.2%
chance of a 25 basis point hike in May, with rate cuts seen in
the second half of the year.
Rising interest rates reduce the appeal of non-yielding
bullion.
Gold might retest a resistance at $2,032, Reuters technical
analyst Wang Tao said.
San Francisco Fed Bank President Mary Daly on Wednesday said
while the Fed had "more work to do" on rate hikes, tighter
credit conditions could argue for a pause.
Richmond Fed President Thomas Barkin said the Fed had more
work to do in bringing inflation down to its 2% target because
the latest data on price pressures was not sufficiently weak.
Minutes from the Fed's March meeting also showed several
policymakers considered pausing rate increases after a forecast
that banking sector stress would tip the economy into recession.
Recession concerns are "allowing gold prices to ride on its
safe-haven status... while technical conditions are revealing
some moderation in upward momentum on recent highs," IG's Yeap
said.
Spot silver fell 0.1% to $25.45 per ounce, platinum edged up 0.1% to $1,016.44 and palladium eased
0.1% to $1,458.66.
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(Reporting by Kavya Guduru in Bengaluru; Editing by Subhranshu
Sahu and Emelia Sithole-Matarise)
