Gold rises towards best month in more than a year, US data in focus

Gold prices climbed on Thursday and were set to log their best month in over a year, bolstered by strong safe-haven demand, U.S. interest rate cut expectations and central bank buying.

Spot gold gained 0.5% to $2,204.99 per ounce as of 10:20 a.m. EDT (1420 GMT), eyeing its best month since November 2022 gaining around 8% so far, and a second straight quarterly rise. U.S. gold futures edged 0.7% higher to $2,204.80.

While there are some indications that inflation is running hotter than policymakers would like, that doesn't necessarily explain the high valuations for gold right now, said Everett Millman, chief market analyst with Gainesville Coins.

"Maybe it has a bit to do with the fact that there are still major geopolitical tensions globally," including in Gaza and Ukraine, as well as trade uncertainty, which could push investors to turn to gold as a neutral reserve asset, Millman said.

Gold hit a record high last week after the U.S. Federal Reserve anticipated three rate cuts in 2024. Traders are currently pricing in a 64% chance of a June rate cut, according to CME's FedWatch tool..

"More signs of cooling price pressures may reinforce expectations around the Fed cutting rates' ultimately boosting appetite for gold. However, a sticky report will likely drag the precious metal lower," said FXTM senior research analyst Lukman Otunuga.

The U.S. core personal consumption expenditure (PCE) price index report is due on Friday, which could help investors gauge the Fed's policy stance.

However, Fed Governor Christopher Waller indicated on Wednesday that recent economic data could warrant a delay or reduction in the number of interest rate cuts.

Silver fell 0.2% to $24.60 per ounce, platinum rose 1.6% to $907.80 and palladium added 3.1% to $1,014.17. All three metals were bound for monthly gains.