NEW YORK / Content Syndication Services / — Gold prices edged higher on Thursday as a softer U.S. dollar lifted demand for bullion, while crude oil held near recent highs and kept the broader inflation backdrop in focus. Spot gold rose 0.2% to $4,696.36 an ounce by 1112 GMT, while U.S. gold futures for June slipped 0.1% to $4,703.70. The move left bullion little changed overall after a volatile week in which energy prices, inflation data and shifting interest-rate expectations drove cross-asset trading.
Oil prices were near flat after earlier gains faded, with Brent crude at $105.63 a barrel and U.S. West Texas Intermediate at $101.03. The weaker dollar offered near-term support to gold by making dollar-priced metal less expensive for buyers using other currencies, but firmer oil limited the upside by reinforcing concern that energy costs could keep price pressures elevated. That kept bullion pinned near recent levels even as investors monitored broader risk sentiment and developments around high-level talks between the United States and China.
Fresh U.S. inflation figures underscored that tension. Consumer prices rose 3.8% in the 12 months through April, up from 3.3% in March, with the energy index up 17.9% from a year earlier and gasoline up 28.4%. Producer prices climbed 1.4% in April, the largest monthly increase in four years, as energy costs accelerated. Those readings strengthened the view that higher fuel prices are feeding through the economy, reducing the room for a strong rally in non-yielding assets such as gold.
Inflation keeps gains in check
The inflation backdrop tempered a market that would normally benefit more clearly from a softer dollar. Traders have sharply reduced expectations for U.S. rate cuts this year, and the Federal Reserve now faces a more difficult policy setting after the latest price data. Gold typically draws support when the dollar weakens or market anxiety rises, but higher oil prices can offset that effect when they heighten concern that borrowing costs will stay elevated for longer. That left bullion supported, though far from breaking decisively higher.
Moves across the rest of the precious-metals complex pointed to the same cautious tone. Spot silver fell 1.3% to $86.86 an ounce, platinum slipped 1.3%, and palladium dropped 2.2%. The split between spot gold and futures also reflected hesitation after gold came under pressure earlier this week when oil climbed sharply. Thursday’s modest rebound suggested investors were willing to add some defensive exposure, but only selectively, as the market balanced currency support against persistent inflation risk linked to energy.
Oil market stays tight
The oil market remained underpinned by supply concerns even after prices gave back part of their early advance. The International Energy Agency said global oil supply fell by a further 1.8 million barrels per day in April to 95.1 million barrels per day, extending losses since February and pointing to a market likely to stay undersupplied through the third quarter. In the United States, commercial crude inventories fell by 4.3 million barrels in the latest weekly report, adding to evidence that balances remain tight despite slower demand in some regions.
By late trade, the result was a narrow but telling move across commodity markets: gold held a small gain, oil stayed elevated, and the dollar eased enough to keep bullion supported without changing the broader picture. The day’s price action showed how closely gold is now tied to energy-driven inflation signals as well as currency moves. For now, bullion is finding support from the weaker dollar, but its gains remain constrained by oil’s resilience and the firmer interest-rate outlook that follows from it.