Investing.com - Gold prices were trading at fresh one-month peaks on Friday despite some hesitation in its bullish momentum. The precious metal has been riding high for the fourth consecutive day, reaching roughly $1,964 during Asian trading hours. This uptick doesn't come without its doubts, but with the 100-day Simple Moving Average (SMA) providing support above it, there are signs of an extended bounce from June's three-and-half-month low of around $1,893.
The weakening American currency seems to be playing into gold’s favour as well. The US dollar hovers near April lows as market participants expect the Federal Reserve to soon conclude its tightening cycle - a move that adds a tailwind to gold prices. Investors appear convinced that after July's expected 25 basis points hike in interest rates by the Fed, rates will hold steady. This belief was reinforced by recently released data showing subdued consumer price growth in June.
Data shows that inflation is cooling down; the headline Consumer Price Index (CPI) grew only 0.2% in June while annual inflation slowed from 4% to 3%, marking the smallest increase since March last year. Additionally, core monthly increases were the lowest since August of the previous year.
Moreover, expectations of just one rate hike this year are adding fuel to gold’s fire too: Inflation at the producer level saw a minimal rise – only about 0.1% - last month while May readings were revised downwards indicating lower than previously reported figures.
However, hawkish comments from Fed Governor Christopher Waller have put some brakes on the gold surge: Waller suggested two more quarter percentage point hikes this year and argued against delaying the first of these hikes till the next meeting later this month.