Gold Trading Lower as U.S. Inflation Surged in March on Higher Gasoline Prices

Gold futures eased early Friday even as the dollar weakened after a report showed U.S. inflation surged in March on higher gasoline prices, cutting hopes for a cut to interest rates from the Federal Reserve.Gold for May delivery was last seen down $31.10 to US$4,786.90 per ounce.The U.S. Bureau of Labor Statistics reported the March Consumer Price Index (CPI) rose to a 3.3% annualized rate in March, the highest since May 2024, up from 2.4% in February, but matching expectations, according to Marketwatch. Core CPI, excluding volatile food and energy prices, rose 2.6%, up from 2.5% a month earlier but came in under the consensus estimate for a 2.7% rise.The Bureau said the rise came on higher gasoline prices "which accounted for nearly three quarters of the monthly all items increase". Fuel prices have surged since the United States and Israel launched their war on Iran on Feb. 28 and Iran closed the Strait of Hormuz, cutting off 20% of daily oil supply from Persian Gulf countries.Gold remains well below its Jan. 29 record high of US$5,354.80 per ounce as rising inflation ends hope for lower U.S. interest rates. The CME FedWatch Tool expects the Federal Reserve to leave interest rates unchanged for the remainder of the year, bearish for gold since it pays no interest.The dollar was lower early, with the ICE dollar index last seen down 0.14 points to 98.69. Treasury yields were mixed, with the U.S. two-year note last seen paying 3.793%, down 2.0 basis points, while the yield on the 10-year note was up 2.5 points to 4.306%.

-- Gold futures eased early Friday even as the dollar weakened after a report showed U.S. inflation surged in March on higher gasoline prices, cutting hopes for a cut to interest rates from the Federal Reserve.

Gold for May delivery was last seen down $31.10 to US$4,786.90 per ounce.

The U.S. Bureau of Labor Statistics reported the March Consumer Price Index (CPI) rose to a 3.3% annualized rate in March, the highest since May 2024, up from 2.4% in February, but matching expectations, according to Marketwatch. Core CPI, excluding volatile food and energy prices, rose 2.6%, up from 2.5% a month earlier but came in under the consensus estimate for a 2.7% rise.

The Bureau said the rise came on higher gasoline prices "which accounted for nearly three quarters of the monthly all items increase". Fuel prices have surged since the United States and Israel launched their war on Iran on Feb. 28 and Iran closed the Strait of Hormuz, cutting off 20% of daily oil supply from Persian Gulf countries.

Gold remains well below its Jan. 29 record high of US$5,354.80 per ounce as rising inflation ends hope for lower U.S. interest rates. The CME FedWatch Tool expects the Federal Reserve to leave interest rates unchanged for the remainder of the year, bearish for gold since it pays no interest.

The dollar was lower early, with the ICE dollar index last seen down 0.14 points to 98.69. Treasury yields were mixed, with the U.S. two-year note last seen paying 3.793%, down 2.0 basis points, while the yield on the 10-year note was up 2.5 points to 4.306%.