Gold gains ground on growing bets for Fed rate cut

Gold prices gained ground today, March 26, amid rising expectations of the Federal Reserve reducing interest rates at the next June meeting, with investors awaiting the release of the Personal Consumption Expenditures (PCE) price index reading.

Bullion for April delivery climbed by 0.46%, or $10.10, to $2,186.50 an ounce at 12:42 pm Makkah time, with spot prices also up 0.68% to $2,186.61 per ounce.

Silver futures for May delivery stabilized at $24.88 an ounce. On the other hand, platinum spot prices increased 0.25% to $907.15 per ounce.

According to CME FedWatch Tool, traders are pricing in a 64.2% chance that the Fed will cut interest rates by 25 basis points (bps) at the June meeting, up from 55.6% a week ago. There is a 30.4% probability of keeping rates unchanged and a 5.4% possibility of a 50-bp reduction.

Analysts expect the core PCE price index, the US central bank’s preferred inflation gauge, to gain 0.3% on a monthly basis for the February reading expected to be released on Friday, after surging 0.4% in January.