Friday, May 24, 2024

Gold stabilizes and oil slumps ahead of US inflation data release


Gold stabilizes and oil slumps ahead of US inflation data release

Gold prices fell on Wednesday and oil prices edged higher in light of US inflation data, which dealers expect could affect monetary policy decisions to be released by the Federal Reserve.

US CPI data is due at 12:30 GMT.

Economists polled by Reuters had expected a 5.5% year-on-year rise in core consumer prices for April.

Markets are currently betting 83% that the US Federal Reserve will keep interest rates on hold in June.

New York Federal Reserve President John Williams said inflation remains too high and the central bank will raise interest rates again if necessary.

Investors are closely watching developments surrounding the US debt ceiling.

President Joe Biden and top lawmakers on Tuesday agreed to further talks aimed at breaking the impasse over raising the US debt ceiling by $31.4 trillion.

Gold consistency

And by 02.01 GMT, gold settled at $2032.86 an ounce in spot deals, and US gold futures were down 0.1% at $2041.50 an ounce.

Although gold is considered a hedge against inflation, high interest rates make bullion attractive, which does not provide returns.

In other precious metals, silver fell 0.1% to $25.58 an ounce, platinum rose 0.1% to $1105.82 and palladium added 0.1% to $1571.23.

oil dip

In energy markets, oil prices fell in early trade on Wednesday after sector data showed a sudden rise in US crude stocks, while investors also awaited inflation data.

Brent crude was down 16 cents at $77.28 a barrel by 00:08 GMT, while US West Texas Intermediate crude was down 20 cents at $73.51, paring gains from the previous session.

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The American Petroleum Institute said on Tuesday that US crude inventories rose by 3.6 million barrels in the week ended May 5, while gasoline stocks rose by 399,000 barrels, in a sign of weaker demand, according to market sources.

US government data on oil inventories is scheduled to be released on Wednesday.

(Reuters, The New Arab)

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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