Gold Price News: Gold Edges Up to Three-Week High

Gold prices ticked higher on Friday to reach a three-week high, building on the previous day’s sharp gains, as US data highlighted consumers’ concerns over persistent inflation.

Prices edged up to as high as $2,379 an ounce on Friday, compared with around $2,346 an ounce in late trades on Thursday. That was the first time gold prices rose above $2,375 an ounce since April 22.

The University of Michigan consumer sentiment figures for the US were released Friday showing that economic sentiment fell to a six-month low in May, and well below market expectations. Inflation expectations for the year ahead rose to 3.5%, the highest in six months. Consumers flagged concerns around inflation, unemployment and high interest rates in the year ahead, all of which paint a somewhat gloomy picture for the economy and boost the appeal of safe haven assets like gold.

In addition, persistent inflation erodes the purchasing power of fiat currencies, which can drive additional flows into assets like gold, whose supply is limited.

The latest figures followed US initial jobless claims numbers released Thursday which came in well above market expectations. A higher-than-expected rise in the number of people seeking unemployment benefits hikes pressure on the US Fed to cut interest rates to stimulate the economy, which would be bullish for non-interest-bearing investments like precious metals.

Looking ahead, the markets will be keeping an eye on further speeches by US Fed officials on Monday for additional clues about monetary policy going forward. Then attention will turn to Tuesday’s Euro Area ZEW economic sentiment figures as well as the US producer prices index for April, for further signals on inflation.