Gold strengthened on Friday (September 26th) after US inflation data matched expectations, bolstering speculation that the Federal Reserve will continue interest rate cuts later this year.

Spot gold rose 0.8% to $3,778.62 an ounce at 1:30 p.m. EDT (17:30 GMT), after hitting a record $3,790.82 earlier in the week. The precious metal has risen about 2.5% this week. US gold futures for December delivery closed 1% higher at $3,809.

"Monthly PCE data was appropriate, although personal income and spending were only a tenth above expectations. None of this data will deter the Fed from continuing its cautious rate cuts at its October meeting," said Tai Wong, an independent metals trader.

Data showed that the US Personal Consumption Expenditures (PCE) price index rose 2.7% year-on-year in August, in line with economists' expectations in a Reuters poll. Investors now see an 88% probability of a rate cut in October and a 65% chance of a rate cut in December. The market will also be watching statements from Richmond Fed President Thomas Barkin and Fed Vice Chair Michelle Bowman for clues on the Fed's stance.

Gold, a traditional safe-haven asset, typically benefits from lower interest rates. On the trade front, President Donald Trump announced a new round of tariffs on imported pharmaceuticals, trucks, and furniture, effective October 1.

Among other metals, spot silver rose 2.6% to $46.41 an ounce, reaching its highest level in more than 14 years, while palladium rose 2.8% to $1,284.77, putting it on track for a weekly gain. Platinum rose 2.5% to $1,568.21, its highest in more than 12 years. (alg)

Source: Reuters