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Gold Prices Drift Higher as Key US Inflation Data Looms

A salesman arranges gold bangles at a jewelry shop in Chennai, India, on May 10, 2024. (Photo by R. Satish BABU / AFP)
A salesman arranges gold bangles at a jewelry shop in Chennai, India, on May 10, 2024. (Photo by R. Satish BABU / AFP)
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Gold Prices Drift Higher as Key US Inflation Data Looms

A salesman arranges gold bangles at a jewelry shop in Chennai, India, on May 10, 2024. (Photo by R. Satish BABU / AFP)
A salesman arranges gold bangles at a jewelry shop in Chennai, India, on May 10, 2024. (Photo by R. Satish BABU / AFP)

Gold prices drifted up on Tuesday, with the spotlight shifting to key inflation reports due this week, which could offer more insights on the pace and scale of the US Federal Reserve's interest rate cuts this year.
Spot gold was up 0.4% at $2,344.39 per ounce by 0557 GMT after falling 1% on Monday, Reuters reported.
US gold futures rose 0.3% to $2,350.00.
The US producer price index data is scheduled for release at 1230 GMT, followed by the consumer price index on Wednesday. The CPI data is expected to show core inflation rose 0.3% month-over-month in April, down from 0.4% the prior month, according to a Reuters poll, pulling the annual rate down to 3.6%.
"If gold manages to hold above $2,320- $2,330 range, that is a sign of positiveness. That means short-term momentum will be bullish and with that support after a weaker CPI data, potentially gold could test the all-time high level in the short-term," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
However, currently "gold prices are supported by ongoing stagflationary risk scenario that is kind of ignoring the whole higher cost of holding gold."
Bullion is known as inflation hedge but elevated interest rates reduce the opportunity cost of holding gold.
Last week's weak jobs report and a softer-than-expected US payrolls report for April have increased expectations for rate reductions this year. The Fed will cut its key interest rate twice this year, starting in September, according to a stronger majority of economists polled by Reuters.
Spot silver rose 0.8% to $28.41 per ounce and palladium gained 0.8% to $968.43.
Platinum was up 0.6% to $1,002.90, after hitting a near one-year peak on Monday.
BHP Group is likely to sweeten its $43 billion takeover offer for Anglo American for a second time and possibly add cash, investors in both companies said, after the London-headquartered target rejected a higher bid.

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US Energy Secretary Says Riyadh and Washington to Sign Civil Nuclear Agreement

US Energy Secretary Chris Wright speaks at the press conference in the Saudi capital Riyadh. Photo: Turki al-Aqaili
US Energy Secretary Chris Wright speaks at the press conference in the Saudi capital Riyadh. Photo: Turki al-Aqaili
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US Energy Secretary Says Riyadh and Washington to Sign Civil Nuclear Agreement

US Energy Secretary Chris Wright speaks at the press conference in the Saudi capital Riyadh. Photo: Turki al-Aqaili
US Energy Secretary Chris Wright speaks at the press conference in the Saudi capital Riyadh. Photo: Turki al-Aqaili

The United States and Saudi Arabia will sign a preliminary agreement on energy cooperation and civilian nuclear technology, US Energy Secretary Chris Wright said on Sunday.

Wright spoke at a press conference in the Saudi capital Riyadh where he arrived from the United Arab Emirates on Saturday as part of a regional tour that will also take him to Qatar.

His visit comes amid world economic turmoil over the tariffs imposed by US President Donald Trump. But Wright said that these tariffs don’t seek to restrict trade, rather they aim for fair and reciprocal trade.

His visit also comes ahead of an expected visit by Trump to the Kingdom, the UAE and Qatar in May to consolidate relations.

The US Energy Secretary told journalists at the Saudi Energy Ministry that Riyadh and Washington were on a "pathway" to reaching an agreement to work together to better develop energy resources and energy infrastructure, in addition to mining cooperation, civilian nuclear technology and energy production.

Wright said further details over a memorandum detailing the energy cooperation between Riyadh and Washington would come later this year.

Saudi Minister of Energy Prince Abdulaziz bin Salman announced last September that the Kingdom is working to develop peaceful uses for nuclear energy across various fields.

In his press conference on Sunday, Wright discussed the meetings he has held in Riyadh. There have “been very wide ranging dialogues for a day and a half now and they're going to continue. We've talked about energy in all aspects of energy. We've talked about mining, critical materials. We've talked about processing in industry. We've talked about climate change. We've talked about human lives and what drives their improvement and how best to achieve those ends,” he said.

On Saturday, Prince Abdulaziz met with Wright at King Abdullah Petroleum Studies and Research Center (KAPSARC) where the US official was briefed on the Center's role in the fields of energy policy research and its transitions, climate change, sustainable transportation, and consultancy services, in addition to the development of models and analytical tools that contribute to finding solutions to current challenges in the energy sector. They also discussed opportunities for cooperation in energy research, exchange of expertise, and strengthening joint research efforts.

Wright said Sunday that he believed “Saudi Arabia will be one of the leading countries in investing in the United States. I think that's a win for the Kingdom here. It's a win for the United States. And for us, most importantly, it's a win for the working class and American citizens to have better job opportunities.”

He added that the “broader objectives” of the US and Saudi Arabia “are prosperity at home and peace abroad.”

Wright also said in response to a question by Asharq Al-Awsat that tariffs are part of Trump's economic agenda.

He said Trump is trying to grow the flow of goods outside the United States into other countries while sustaining imports and engagement with countries from around the world. “So that's a way you could describe this. Fair trade, not restricted trade, just fair trade, reciprocal trade.”

He added that the United States has seen a lot of its intensive industries, particularly energy, move outside of the country and be outsourced somewhere else. “Too many Americans have seen their job opportunities shift overseas.”

“So tariffs are also a way to give a nudge and encourage investment into our country, to make products in our country, to grow economic opportunity and prosperity in America.”