Gold prices climb as Middle East tensions rise, US inflation eases

Gold prices rose on Thursday, as rising Middle East tensions boosted demand for safe-haven assets, while softer-than-expected U.S. inflation data raised expectations of potential interest rate cuts by the Federal Reserve.

FUNDAMENTALS

* Spot gold was up 0.3% at $3,364.10 an ounce, as of 0017 GMT. U.S. gold futures gained 1.2% to $3,384.40.

* The U.S. dollar index edged 0.1% lower, making greenback-priced bullion less expensive for overseas buyers.

* Gold prices gained as investors sought safe-haven assets amid rising geopolitical uncertainty sparked by U.S. President Donald Trump’s comments that U.S. personnel were being relocated from the Middle East due to heightened risks. * The U.S. data prompted renewed calls from Trump for the Fed to implement significant rate cuts.
* Data showed the Consumer Price Index rose 0.1% in May, below economists’ expectations of 0.2%, as lower gasoline prices partially offset increases in rent. However, inflation is expected to accelerate in the coming months due to import tariffs imposed by the Trump administration.
* Traders now expect a 50-basis-point rate cut by the year-end, with market participants awaiting U.S. producer price index data, due at 1230 GMT, for additional signals on the Fed’s policy path ahead of its June 17-18 meeting.
* Meanwhile, Trump said on Wednesday that a deal to restore a fragile truce in the U.S.-China trade war had been reached after negotiators from Washington and Beijing agreed on a framework covering tariff rates.

* Trump added that he would be willing to extend a July 8 deadline for completing trade talks with other countries before higher U.S. tariffs take effect but did not believe that would be necessary.

* Elsewhere, spot silver was up 0.3% at $36.32 per ounce, platinum rose 0.8% to $1,265.32, still hovering near more than 4-year high, while palladium was down 1% at $1,069.65. DATA/EVENTS (GMT) 0600 UK GDP Est 3M/3M April 0600 UK GDP Estimate MM, YY April 0600 UK Services MM, YY April 0600 UK Manufacturing output April 1230 US Initial Jobless Claim Weekly 1230 US PPI Machine Mfg May 1600 US Federal Reserve issues Quarterly.