- US inflation data due on Friday
- Silver up more than 1%
Oct 23 (Reuters) – Gold prices rose on Thursday as U.S. sanctions against Russia and possible new export controls on China added to geopolitical risks, while investors looked forward to key U.S. inflation data later this week for more cues on the interest rate path.
Spot gold was up 0.7% at $4,123.39 per ounce, as of 0627 GMT. U.S. gold futures for December delivery climbed 1.8% to $4,138.10 per ounce.
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The Trump administration is considering a plan to curb a dizzying array of software-powered exports to China, from laptops to jet engines, to retaliate against Beijing’s latest round of rare earth export restrictions.Meanwhile, Trump imposed Ukraine-related sanctions on Russia for the first time in his second term, targeting oil companies Lukoil and Rosneft.
“At this moment, in the longer term we are still bullish on gold, but in the short term investors have got to be cautious because the volatility is big,” GoldSilver Central MD Brian Lan said.
Focus this week will be on the U.S. Consumer Price Index (CPI) report, due on Friday after a delay due to the government shutdown, is expected to show that core inflation held at 3.1% in September.
Investors have almost fully priced in a 25-basis-point rate cut at the Federal Reserve’s meeting next week.
Gold tends to appreciate when interest rates are low as they reduce the opportunity cost of holding non-yielding bullion.
“We continue to view gold as an effective portfolio diversifier, with further gains toward our upside case of $4,700/oz still possible should adverse macro and political developments emerge,” Mark Haefele, Chief Investment Officer at UBS said in a note.
Gold prices have gained about 57% this year, reaching an all-time peak of $4,381.21 on Monday, bolstered by geopolitical and economic uncertainties, rate-cut bets and sustained central bank buying.
Elsewhere, spot silver rose 1.2% to $49.10 per ounce, platinum slipped 1.1% to $1,603.70 and palladium lost 0.9% to $1,445.43.
Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Ronojoy Mazumdar
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