Gold prices rise over 1% on softer dollar and weak economic data

Gold prices rose more than 1% on Thursday, aided by a softer dollar and weak US economic data, while Russian President Vladimir Putin’s failure to attend peace talks drove some safe-haven buying.

Spot gold rose 1.3% to USD 3,218.89 an ounce by 1351 ET (17:51 GMT) after hitting a more than one-month low earlier in the session.

US gold futures settled 1.2% higher at USD 3,226.6.

The dollar index slipped 0.1%, making dollar-priced gold cheaper for overseas currency holders.

Data showed US producer prices unexpectedly fell in April, while retail sales growth slowed. Earlier this week, a report showed consumer prices rose less than expected in April.

Markets are pricing the Federal Reserve to cut rates by September. Lower interest rates help increase bullion’s attractiveness as it is a non-yielding asset.

Thursday’s data creates more room for the Fed to cut rates, with a more dovish expectation building in the market, said Peter Grant, vice president and senior metals strategist at Zaner Metals.

“Putin not attending the peace talks in Turkey dims expectations of progress towards a peace deal, which I think is helping to underpin gold prices today,” Grant added.

Putin sent a second-tier team of negotiators to hold peace talks with Ukraine in Turkey, spurning Kyiv’s challenge to go there in person to meet President Volodymyr Zelenskiy.

Analysts say investors remain cautious as global trade tensions continue, although the US and China have agreed to a temporary tariff deal for 90 days.

Spot silver rose 0.8% to USD 32.47 an ounce, platinum added 1.3% to USD 989.01, and palladium was up 1.2% to USD 962.33.

The palladium market, which was in a deficit in 2012-2024, will move into balance this year, with demand falling due to lower production of gasoline vehicles and increased recycling in China, Johnson Matthey said.

(Reporting by Sarah Qureshi and Ashitha Shivaprasad in Bengaluru; editing by Barbara Lewis and Vijay Kishore)