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Gold Holds Modest Gain as Inflation Data Aids US Rate-Cut Bets

(Bloomberg) -- Gold held a modest gain following a US inflation reading that was in line with expectations and reinforced wagers on an interest-rate cut next month.

Bullion was steady after closing 0.2% higher in the previous session, following a report that showed underlying US inflation accelerated to the strongest since the start of the year — though a tepid rise in goods prices eased concerns about tariff-driven pressures.

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The print boosted speculation that the Federal Reserve will reduce borrowing costs next month, especially given a softening labor market. Gold, which pays no interest, typically benefits in a lower rate environment.

Traders are still on the lookout for clarification on whether gold bar imports would be subject to tariffs. On Monday, Trump said there would not be a levy but didn’t elaborate. That’s after the Customs and Border Protection agency stunned the market on Friday by saying they would be subject to duties.

Prices for gold futures in New York and spot gold in London continued to converge after Trump’s comments. December gold futures on New York’s Comex held near $3,400 an ounce on Wednesday, while spot gold traded near $3,350 an ounce. Adjusting for the different delivery dates, the two markets are almost level.

Gold has climbed about 28% this year, with the bulk of those gains occurring in the first four months. It has been supported by heightened geopolitical and trade tensions that have spurred haven demand, along with strong central bank purchases.

Spot gold edged 0.1% higher to $3,351.25 an ounce at 7:37 a.m. in Singapore. The Bloomberg Dollar Spot Index was little changed, after posting a 0.4% loss on Tuesday. Silver and platinum were steady, while palladium dipped.