Gold headed for weekly gains on revived hopes of Fed rate cuts

Gold prices firmed on Friday and were headed for a third straight week of gains after U.S. data this week hinted that the Federal Reserve might continue easing interest rates this year.

FUNDAMENTALS

* Spot gold was flat at $2,715.21 per ounce as of 0047 GMT, hovering near a more than one-month peak hit on Thursday. Bullion has gained about 1% so far this week.

* U.S. gold futures dropped 0.1% to $2,747.50.

* Fed Governor Christopher Waller said three or four rate cuts are still possible this year if U.S. economic data further weakens. * The Fed’s rate-cut hopes increased after the CPI data on Wednesday. The central bank is expected to hold the benchmark rate steady in the current 4.25%-4.50% range at its policy meeting on Jan. 28-29.
* Gold is used as an inflation hedge but higher interest rates dampen its appeal.
* A barrage of U.S. data, including retail sales and initial jobless claims, also weighed on Treasury yields and the U.S. dollar, supporting gold.
* U.S. inflation data for December 2024 indicates price pressures are continuing to ease, Richmond Fed President Thomas Barkin said.

* However, concerns linger around the incoming Donald Trump administration’s potential tariffs, which could further stoke inflation.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.43% to 868.78 tonnes on Thursday from 872.52 tonnes on Wednesday.

* Spot silver rose 0.1% to $30.82 per ounce, adding over 1% for the week.

* Palladium eased 0.1% to $937.25 and platinum shed 0.1% to $931.85. Both were headed for weekly losses.