Gold edges higher after Fed’s inflation warning triggers decline
Gold edged higher following a decline in the previous session triggered by Federal Reserve chairman Jerome Powell’s warning of inflation risks for the US economy.
Bullion was trading around $3 380 an ounce early in Asia, after falling 0.6% on Wednesday. While the Fed left rates unchanged and policymakers still penciled in two cuts by year-end, Powell said the central bank’s market committee continued to expect tariffs to work their way into final prices.
Fed policymakers also released new economic forecasts — their first since President Donald Trump unveiled a sweeping set of tariffs in April — showing they expect weaker growth, higher inflation and lower employment this year. A significant rise in consumer prices may curtail monetary easing, which would be a negative for gold as it doesn’t pay interest.
Gold is still finding support from ongoing tensions in the Middle East. Trump said Iran had squandered the chance to make a deal over its nuclear capabilities, but offered no commitments as to whether the US would join Israel’s offensive. The heightened geopolitical tensions and economic uncertainty have combined with robust buying from central banks and inflows to exchange-traded funds, pushing the precious metal almost 30% higher this year.
Spot gold rose 0.3% to $3 378.59 an ounce as of 8:21 a.m. Singapore time. Bloomberg Dollar Spot Index was little changed. Silver was flat, while platinum and palladium gained.
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