Gold price surpasses $5,000 again as mild inflation strengthens expectations of a Fed rate cut

Gold prices strengthened as traders further bet on a Federal Reserve rate cut following the release of mild inflation data, while some investors chose to buy the dip after a sharp decline in gold prices on Thursday. The relatively mild U.S. January inflation data effectively eased market concerns about rapidly rising inflation, boosting market expectations for a Fed rate cut. After the data was released, the yield on the U.S. 10-year Treasury note fell, and interest rate swap market traders estimated about a 50% chance that the Fed would implement a third rate cut before December. As a result, gold prices rose as much as 2.3% intraday. Generally, falling interest rates are favorable for non-yielding assets like gold. Spot gold rose 1.9% intraday to $5,016.90 per ounce. Silver rose 3.4% to $77.81 per ounce, while platinum and palladium prices also climbed, and the U.S. dollar index fluctuated within a limited range.