Gold prices pared Wednesday’s gains after the release of higher-than-expected US PPI. Economists at ANZ Bank analyze the yellow metal’s outlook.
Strong CPI and PPI numbers this week weighed on market expectations of a sooner rate cut this year.
Market pricing for a 25 bps rate cut in June is 75%, down from 95% at the start of the week. The FOMC is adopting a cautious stance and would like to see more evidence of inflation falling to the target of 2% before start cutting interest rates.
Investors will watch the Fed’s pivot to easing monetary policy before adding Gold.
Strategic investments in form of ETFs are yet to turn positive.
