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UN: World Food Prices Ease Slightly in July

FILE PHOTO: A person shops at a Whole Foods grocery store in the Manhattan borough of New York City, New York, US, March 10, 2022. REUTERS/Carlo Allegri/File Photo
FILE PHOTO: A person shops at a Whole Foods grocery store in the Manhattan borough of New York City, New York, US, March 10, 2022. REUTERS/Carlo Allegri/File Photo
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UN: World Food Prices Ease Slightly in July

FILE PHOTO: A person shops at a Whole Foods grocery store in the Manhattan borough of New York City, New York, US, March 10, 2022. REUTERS/Carlo Allegri/File Photo
FILE PHOTO: A person shops at a Whole Foods grocery store in the Manhattan borough of New York City, New York, US, March 10, 2022. REUTERS/Carlo Allegri/File Photo

The United Nations world food price index eased slightly in July according to data released on Friday, with a decline in the index for cereals partially offset by increases for meat, vegetable oils and sugar.
The UN Food and Agriculture Organization's price index, which tracks the most globally traded food commodities, averaged 120.8 points in July, down from 121.0 in June. The June reading was revised after initially being given as 120.6, Reuters said.
Prior to July, the FAO index had risen for four consecutive months after hitting a three-year low in February as food prices receded from a record peak set in March 2022, following Russia's invasion of fellow crop export major Ukraine.
The July value was 3.1% down on its level one year ago and 24.7% below its 2022 high point.

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Gold Advances as Softer Core CPI Data Revives Fed Easing Hopes

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
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Gold Advances as Softer Core CPI Data Revives Fed Easing Hopes

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)

Gold prices extended gains on Wednesday, as the dollar dipped after US core inflation data came in softer than expected, abating inflation pressures and rekindling expectations that the Federal Reserve's easing cycle may not be over yet.

Spot gold gained 0.4% to $2,688.19 per ounce by 0915 a.m. ET (1415 GMT). US gold futures were up 1.1% to $2,711.40.

Excluding volatile food and energy components, core CPI increased 3.2% on an annual basis, compared with an expected 3.3% rise, the US Bureau of Labor Statistics said on Wednesday, Reuters reported.

"Core CPI came in a little bit below expectations. This is a bit of a positive for gold... The corollary to this is that the Fed will not necessarily exclude the possibility of cutting rates," said Bart Melek, head of commodity strategies at TD Securities.

"The probability of a rate cut in January is kind of nothing, but we are pricing some rate cuts by the end of the year here."

Markets now expect the Fed to deliver 40 basis points (bps) worth of rate cuts by year-end, compared with about 31 bps before the inflation data.

The dollar index eased 0.4%, making bullion more attractive for other currency holders. The benchmark 10-year Treasury yields also slipped.

Investors are worried that the potential for tariffs after President-elect Donald Trump re-enters the White House next week could stoke inflation and limit the Fed's ability to lower rates to a greater extent.

Non-yielding bullion is considered a hedge against inflation, although higher rates diminish its appeal.

However, the uncertainties around Trump's tariffs and trade policies for the global economy and their potential impact on growth are likely to sustain safe-haven demand for gold, said Zain Vawda, market analyst at MarketPulse by OANDA.

Spot silver firmed 1% to $30.23 per ounce, platinum rose 0.4% to $938.70, and palladium added 2% to $960.25.