Gold’s Shine Returns After Inflation Numbers Release

NEW YORK (May 17) Gold’s (CM:XAUUSD) shine has returned owing to the latest soft inflation numbers release for April. The yellow metal is up by 1% over the past five sessions and nearly 20% over the past year. Meanwhile, silver (CM:XAGUSD) is putting up impressive gains of its own as well.

The Yellow Metal Shines

The month-on-month moderating pace of inflation in April raised hopes for a rate cut, fueling cautious optimism in gold. Importantly, the price gains have come despite Fed Chair Jerome Powell signaling that the Fed will likely continue with its current stance, meaning rates may not decline anytime soon.

This points to strength in gold amid safe-haven buying and demand from major central banks. Asian economic giants China and India have been accumulating gold for quite some time now. The net gold purchases from India’s central bank this year are already above its entire gold buying in 2023. According to the World Gold Council, global gold reserves rose by a net 228 metric tons in Q1 2024, surpassing the previous first-quarter record set nearly 11 years ago.

Silver Joins in on the Rally

Joining in on the rally in gold is silver, with a nearly 20% gain over the past year: Silver has been one of the top-performing major commodities this year on the back of retail as well as industrial demand. Silver is a key component in solar panels, and the robust growth in the solar industry suggests its usage (and demand) could remain buoyant.

TipRanks