WASHINGTON (dpa-AFX) - Gold futures settled higher on Monday despite the dollar's strength amid slightly fading optimism about an early interest rate cut by the Federal Reserve after data showed an increase in annual rate of consumer price growth in the U.S.
Data showing a modest growth in U.S. manufacturing activity in the month of March lifted the dollar. The yield on long-term Treasury note climbed as well.
The dollar index climbed to 105.08, gaining about 0.5%. The yield on U.S. 10-year Treasury note advanced to 4.328%, from the previous close of 4.205%.
Gold futures for June ended higher by $18.70 at $2,257.10 an ounce, coming off the day's high of $2,286.40 an ounce.
Silver futures for May ended up by $0.157 at $25.073 an ounce, while Copper futures for May settled at $4.0485 per pound, gaining $0.0415.
Data released by the Commerce Department on Friday showed the annual rate of consumer price growth ticked up to 2.5% in February from 2.4% in January, in line with estimates.
Meanwhile, the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 2.8% in February from an upwardly revised 2.9% in January. Economists had expected the pace of core price growth to come in unchanged compared to the 2.8% originally reported for the previous month.
After the inflation data, Fed Chair Jerome Powell said that the central bank will not overreact to the data, suggesting the bank is content to remain in wait-and-watch mode.
A report released by the Institute for Supply Management this morning showed a modest growth in U.S. manufacturing activity in the month of March, contributing to a jump in Treasury yields.
The ISM said its manufacturing PMI jumped to 50.3 in March from 47.8 in February, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 48.4.
With the much bigger than expected increase, the index returned to expansion territory for the first time since September 2022.
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