The value of gold as the world's famous yellow metal rose suddenly during the mid-North American session on Thursday following the release of the US Consumer Price Index (CPI) and opened up hopes of the Federal Reserve (Fed) to reduce the interest rate.
US Treasuries slumped with the 10-year yield down ten points to 4.187% and the US Dollar Index (DXY) also shed more than 0.40% at 104.48.
Meanwhile, the price of gold is now at $2,408.77, which is slightly down 0.29% since it opened in the Asian trading session this morning.
Data from the US Bureau of Labor Statistics (BLS) revealed that user rates plunged in June. Excludes items such as food and energy. Reported figures for the core also declined and revived hopes that the Fed could reduce the rate by the end of 2024.
Market forecasts put an 85% chance of the cuts taking effect this September, up from 70% on Wednesday.
The December 2024 fed funds rate forward contract envisages that the Fed will ease the floor by 49 bases by the end of the year, which is up from the forecast of 39 a day ago.
Additionally, other data showed the labor market remained firm as the number of Americans taking advantage of unemployment benefits exceeded consensus and was lower than previous readings.
At the end of the week, the US economic schedule will feature the Consumer Price Index (PPI) for June and a review of University of Michigan User sentiment tonight.
