Gold Trims Losses After US Inflation Data

Gold ⁠trimmed losses on Thursday following the release of U.S. April inflation data, but prices were still ​down for a third ​straight session as ​skepticism over a U.S.–Iran deal clouded the interest rate outlook.

Spot gold was down 0.6% at $4,428.69 an ounce, after falling ⁠to ‌its lowest level since late March earlier in ⁠the session. U.S. gold futures fell 0.5% to $4,426.20.

Data showed that the U.S. personal consumption expenditures price index jumped 3.8% in the 12 months through April, in line with expectations. The ‌PCE price index rose 0.4% month-on-month in April after shooting up 0.7% in March.

The data gave gold a slight reprieve, ​suggesting the Federal Reserve may opt to hold interest rates where they are rather than pursue a tighter policy, said Bart Melek, global head of commodity strategy at TD Securities.

Gold could still trend significantly lower from here because even if the war stops now, energy prices could ‌remain higher, he added.

Minutes of the Fed's ‌April 28-29 meeting published last week showed a growing number of officials open to the possibility that they may need to raise rates.

Despite its safe-haven appeal, bullion ⁠underperforms when interest rates rise, as investors gravitate toward yield-bearing assets.

"The problem for ⁠gold is that geopolitical instability is no longer operating in ⁠isolation. Higher energy prices are once again feeding into inflation concerns, pushing Treasury yields modestly higher and strengthening the dollar ​at the same time," said Fawad ‌Razaqzada, market analyst at City Index.

In geopolitics, Iran targeted a U.S. air base after the United States struck what Washington described as an Iranian drone operation near the Strait of Hormuz and President Donald Trump rejected a reported ​compromise deal with Tehran.

Spot silver fell ‌1.2% to $73.69 per ounce and platinum lost 1.6% to $1,887.75. Palladium slipped 3.1% to $1,347.31. ​