Gold price hits new record after softer U.S. inflation data

Spot gold rose to $4,633.86 an ounce as U.S. CPI came in below expectations, lifting market bets on potential Federal Reserve rate cuts and continuing a rally that began amid debate over Fed independence.

Gold rose to a fresh record on Tuesday after new U.S. inflation data weakened expectations for near-term rate increases. Spot gold reached $4,633.86 per ounce and U.S. futures were near $4,612.10. The CPI reading fell short of analyst expectations, which markets took as increasing the likelihood of Federal Reserve rate cuts. Debate over the Fed's independence and the timing of the Fed chair's term are also being cited as ongoing influences on gold demand. Key details: - Spot gold was reported at $4,633.86 per ounce, up about 0.3% on the day and roughly 6% so far this year. - U.S. gold futures were around $4,612.10 per ounce. - The U.S. CPI reading came in below analyst expectations and was reported to raise chances of Fed rate cuts. - David Meger of High Ridge Futures is quoted linking the market's positive tone to the benign CPI data. - BNP Paribas' David Wilson noted uncertainty over Federal Reserve independence and that Jerome Powell's term as Fed chair ends in May. - The article mentions that Citigroup published a forecast this week projecting gold could reach $5,000 an ounce within the next three months. Summary: Gold's rise reflects market attention to softer inflation and increased expectations of U.S. interest-rate easing. Ongoing debate about the Federal Reserve's independence and the approaching end of the Fed chair's term are cited as continued drivers of demand. Major bank forecasts and geopolitical considerations are also noted as contributors to the rally.