Gold was largely steady on Thursday,
as investors focused on a meeting between U.S. President Donald
Trump and his Chinese counterpart Xi Jinping, while digesting a
rise in U.S. inflation driven by the increased energy costs
linked to the Iran war.
Spot gold inched up 0.1% at $4,689.79 per ounce, as
of 0931 GMT. U.S. gold futures for June delivery fell
0.2% at $4,696.20.
China’s Xi Jinping told Trump that trade talks were making
progress at the start of a two-day summit on Thursday but that
disagreement over Taiwan could damage relations and even lead to
conflict.
“Gold is hovering around $4,700 as markets are still
digesting U.S. inflation data. It is very clear that we are in a
consolidation phase,” said Swissquote analyst Carlo Alberto De
Casa.
Data on Wednesday showed that U.S. producer prices posted their
biggest increase in four years in April, the latest sign of
accelerating inflation. Data on Tuesday had shown U.S. annual
consumer inflation posted its largest gain in three years.
Traders have largely priced out U.S. interest rate cuts this
year due to rising energy prices, with markets anticipating a
29% chance of a hike by December, according to CME Group’s
FedWatch tool.
The U.S. Senate approved Kevin Warsh as chair of the Federal
Reserve as the U.S. central bank grapples with inflation that
may make it hard to deliver the interest-rate cuts that Trump
has demanded.
While gold is considered a hedge against inflation, higher
interest rates tend to weigh on the non-yielding metal.
Meanwhile, HSBC raised its silver price forecasts to $75 per
ounce for 2026, citing the weaker U.S. dollar, although the bank
believes further room to the upside is limited as silver remains
overvalued.
Spot silver fell 1.1% to $87 per ounce, platinum
fell 0.9% to $2,117.35, and palladium was down
1.3% at $1,480.56.