Gold Hits One-month High as Prospects for Fed Cuts Rise on Softer US Inflation Data

Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
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Gold Hits One-month High as Prospects for Fed Cuts Rise on Softer US Inflation Data

Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
Gold prices firmed near one-month highs hit earlier on Thursday - File Photo

Gold prices firmed near one-month highs hit earlier on Thursday after a softer-than-expected core US inflation print increased chances of two Federal Reserve rate cuts this year, with the first likely in June.

Spot gold gained 0.3% to $2,704.56 per ounce as of 0934 GMT after hitting its highest level since Dec. 12 earlier in the session. US gold futures gained 0.7% to $2,736.50.

Further gains in safe-haven bullion were, however, limited as Hamas and Israel reached a deal for a ceasefire in Gaza after 15 months of conflict and heightened Middle East tensions, according to Reuters.

Gold rallied to multiple-record highs and is still up nearly 50% since the war began in October 2023.

"Although de-escalating geopolitical tensions can dilute demand for safe havens, bullion is still holding on to most of its post-CPI gains, suggesting that the Fed rate outlook remains the primary driver for gold prices," said Exinity Group chief market analyst Han Tan.

"Gold should find itself in a supportive environment, so long as market participants can hold on to expectations for Fed rate cuts in 2025."

Interest rate futures traders are pricing in near-even odds that the Fed would reduce rates twice by the end of this year, with the first reduction to come in June. Before the inflation data on Wednesday, futures were only pricing a single quarter-point interest-rate cut in 2025.

Core US inflation increased 0.2% in December after rising 0.3% for four straight months.

Central bank officials noted US inflation continues to ease after Wednesday's data, but foresee uncertainty due to anticipated Trump administration policies.

Investors are worried that the potential for tariffs after 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, a hedge against inflation, loses its appeal with higher interest rates.

Elsewhere, spot silver rose 0.7% to $30.87 per ounce and platinum firmed 0.6% to $944.23, while palladium fell 0.8% to $953.49.



Abu Dhabi's Long-haul Carrier Etihad Airways Sees Record $476 ml Profit in 2024

An Etihad Airways plane lands at Heathrow during Storm Isha in London, Britain, January 22, 2024. REUTERS/Matthew Childs/File Photo
An Etihad Airways plane lands at Heathrow during Storm Isha in London, Britain, January 22, 2024. REUTERS/Matthew Childs/File Photo
TT

Abu Dhabi's Long-haul Carrier Etihad Airways Sees Record $476 ml Profit in 2024

An Etihad Airways plane lands at Heathrow during Storm Isha in London, Britain, January 22, 2024. REUTERS/Matthew Childs/File Photo
An Etihad Airways plane lands at Heathrow during Storm Isha in London, Britain, January 22, 2024. REUTERS/Matthew Childs/File Photo

Long-haul carrier Etihad Airways announced Wednesday it made a record $476 million profit in 2024, part of a financial rebound for the Abu Dhabi-based airline.

The airline had revenues of nearly $6.9 billion in 2024, compared to $5.5 billion in 2023. Its profit in 2023 was just $143 million.

Etihad attributed its higher profit to increased passenger numbers, a recovery in its cargo operations and cutting its costs. It flew 18.5 million passengers in 2024, up 32%. Its cargo revenues for the year were $1.1 billion, up 24%, The AP reported.

“These results are testament to the dedication of our people who have worked together for a purpose: delivering our strategy," CEO Antonoaldo Neves said in a statement. “Looking ahead, I am confident we will continue to be a financially strong airline delivering extraordinary customer experiences, fulfilling our shareholders' mandate and contributing to the long-term prosperity and success of the UAE.”

Etihad’s network now flies to 80 locations with a fleet of 97 aircraft.