Gold is under the influence of hawkish rhetoric from Fed officials
Gold prices turned upward as the markets redefined the interest rate route following the hawkish statements of the US Federal Reserve (Fed) officials.
Gold pared Thursday’s losses after Fed officials reiterated that US inflation must fall further to ensure borrowing costs are reduced.
After a strong rise to a record in mid-April, gold has traded in a very narrow range over the past few weeks due to the uncertainty of interest rates in the US. Still, gold is heading for its second straight weekly rise as markets have increased their bets on interest rate cuts in recent weeks.
Spot gold is trading at $2,385 per ounce, with a 0.3 percent increase on the last trading day of the week.
Data released on Wednesday overshadowed optimism about easing price pressures as it showed a key gauge of US inflation cooled in April for the first time in six months.
While swap investors priced the probability that the Fed would cut interest rates at the end of April at 30 percent, they reduced this probability to 51 percent for September.
On the other hand, the yield on US Treasury bonds rose as Richmond Fed President Thomas Barkin and New York Fed President John Williams signaled that borrowing costs should remain high for longer.