Gold prices closed higher on Thursday, recovering ground as the US dollar retreated following the release of the Personal Consumption Expenditures (PCE) price index.
The data came in below market expectations, providing a temporary relief valve for investors who have been grappling with persistent inflationary signals.
The softer print triggered a sell-off in the greenback, which in turn supported the non-yielding metal.
Traders are interpreting the deviation from consensus as a sign that underlying price pressures may be easing, at least in the short term, despite the broader trend of elevated costs.
This development stands in contrast to earlier reports indicating that US core PCE inflation had risen to an annual rate of 3.4% in May, the highest level since October 2023.
Those figures, driven largely by surging energy costs, had previously complicated the Federal Reserve's policy outlook and fueled concerns about a prolonged period of higher interest rates.