Gold Steadies Near $4,000 as Inflation Data Eases Rate-Hike Bets

Gold steadied near $4,000 an ounce as the latest US inflation gauge tempered expectations for an interest-rate hike, capping a tumultuous week that saw bullion slump to the lowest since November.

Spot gold was little changed in early trading, having clawed back 0.7% in the previous session. Treasury yields dipped Thursday after the US personal consumption expenditures price index — the Federal Reserve’s favored inflation gauge — rose by a less-than-expected 0.4% in May.

That relieved some pressure on gold, which remained on track for a fourth weekly loss. Bond traders are pricing in slightly lower prospects for a rate hike this year, while the chance of an increase next month dwindled to about one-in-three. Higher borrowing costs are a headwind for non-yielding precious metals.

A gauge of the dollar also snapped a winning streak on Thursday, after gaining 1.8% since the latest Fed meeting last week, where policymakers signaled support for higher borrowing costs and new chair Kevin Warsh adopted a hawkish tone. A stronger dollar makes commodities priced in the US currency more expensive for most buyers.

Spot gold was 0.1% lower at $4,021.88 an ounce at 7:46 a.m. in Singapore. Silver also dipped 0.1% to $57.80, following a gain of 0.8% on Thursday. Platinum and palladium edged lower. The Bloomberg Dollar Spot Index was marginally higher.