Investing.com– Gold prices rose Wednesday, helped by benign US inflation data weighing on the dollar.
At 09:25 ET (14:25 GMT), spot gold rose 0.4% to $2,687.87 an ounce, while gold futures expiring in February rose 1.1% to $2,711.61 an ounce.
Core CPI data cooler than expected
Headline US consumer prices rose in line with expectations in December, while an underlying measure was slower than anticipated, a reading that could play into the Federal Reserve’s interest rate policy plans.
The headline consumer price index increased by 0.4% last month, accelerating slightly from 0.3% in November, while the annual figure climbed by 2.9%, faster than the prior reading of 2.7%.
However, the so-called “core” measure, which strips out volatile items like food and fuel, edged up by 0.2% month-on-month and 3.2% year-over-year, below November’s pace of 0.3% and 3.3%, respectively.
In the build-up to the report, concerns swirled around nagging inflation, after last week’s blockbuster employment data as well as President-elect Donald Trump’s vow to impose strict tariffs on allies and adversaries alike fueled the worries over lingering price pressures.
The central bank signaled a slower pace of rate cuts in 2025 due to concerns over a strong labor market and sticky inflation.
Higher rates bode poorly for non-yielding assets such as gold, given that they increase the opportunity cost of investing in them.
Additionally, the cooler inflation weighed on the dollar, with the dollar index down 0.5%, making commodities denominated in the dollar, like gold, cheaper for foreign buyers.
Other precious metals were mixed on Wednesday. Platinum futures rose 0.3% to $952.10 an ounce, while silver futures rose 2.5% to $31.093 an ounce.
Copper gains amid China focus
Among industrial metals, copper prices rose Wednesday, continuing the strong gains so far in 2025 amid expectations of increased stimulus measures in top importer China.
Benchmark copper futures on the London Metal Exchange rose 0.6% to $9,207.00 a ton, while March copper futures rose 0.8% to $4.377 a pound.
Weak economic readings from China sparked increased hopes that Beijing will unlock even more stimulus to support the economy, as did expectations of trade tariffs under Trump.
But import data released this week showed China’s copper imports hit a 13-month high in December, signaling that demand for the red metal remained strong.
Focus this week is on a decision by the People’s Bank on its benchmark loan prime rate, due on Thursday.
(Ambar Warrick contributed to his article.)
This post is originally published on INVESTING.
