Source: Yahoo Finance

Gold reacts to U.S. inflation data

Gold prices advanced on Friday after U.S. economic data showed inflation running in line with expectations. The August Personal Consumption Expenditures price index rose 2.7% year-on-year, confirming economists’ forecasts and reinforcing the view that the Federal Reserve may continue to ease policy in the months ahead.

Spot gold climbed 0.8% to $3,778.62 an ounce by early afternoon trading in New York, having touched a record high of $3,790.82 earlier in the week. U.S. gold futures for December delivery closed 1% higher at $3,809. Overall, the metal is on track for a weekly gain of around 2.5%.

According to the analysts, investors now consider an 88% probability of a rate cut in October, with a further 65% chance of a subsequent move in December. They said that the PCE print met expectations, while personal income and spending positively surprised.

Silver and platinum reached multi-year highs.

Silver rallied strongly, rising 2.6% to $46.41 per ounce, its highest level in over 14 years. Platinum also pushed higher, gaining 2.5% to $1,568.21 and seen the strongest price in over a decade. Analysts note that both metals are benefiting from elevated gold prices, with some investors switching to more affordable alternatives.

Momentum in the silver market was further supported by China’s pledge to cut carbon emissions by 7–10% by 2035. This target is expected to boost demand for silver used in solar technologies. Environmental policies are giving silver an extra push, on top of its safe-haven appeal.

The rally in platinum is also seen as part of a broader trend of renewed investor interest in precious metals that serve dual roles as industrial materials and investment assets.

Palladium and market sentiment

Palladium also joined the rally, rising 2.8% to $1,284.77 per ounce, heading towards a solid weekly gain. Traders pointed to tightening supply conditions and improving sentiment in the metals sector as the reasons for its recent strength.

Overall, analysts believe that the combination of supportive US monetary policy signals and strong demand in the green and industrial sectors has created a favourable backdrop for the precious metals complex. Should rate cuts materialize later this year, gold and its peers may continue to benefit from both macroeconomic and structural trends.