XAU/USD: Gold Jumps 2% to $2,400 After Soft US Inflation Raises Rate Cut Prospects

inflation figures, which in turn help set expectations for the highly anticipated interest rate cuts by the Federal Reserve. The play goes like this: lower inflation could lead to lower interest rates.

And lower interest rates could lead to higher gold prices. This is because when borrowing costs go down, dollar deposits yield less and that lowers the opportunity cost of holding gold, which doesn’t yield anything. Against this backdrop, the precious commodity is set to close out the third straight winning week. Over that time span, it has added nearly 5% to its price tag.