Gold prices soar as US business activity slows, reignites Fed rate cut hopes

• Gold climbs over 0.80% after hitting a daily low of $2,314.
• Mixed US economic data and stable PCE inflation raise hopes for Fed rate cuts.
• US Treasury yields drop, extending Greenback’s losses for the third consecutive day.

Gold climbed more than 0.80% after US Treasury bond yields dropped following the release of mixed data from the United States (US), increasing hopes that the US Federal Reserve might ease policy. That, along with a risk-off impulse, kept the yellow metal climbing after hitting a daily low of $2,314 and trading at $2,345.

Last week, the Fed’s preferred inflation gauge, the US Core Personal Consumption Expenditure Price Index (PCE), stabilized, augmenting hopes for rate cuts. Meanwhile, business activity was mixed, according to reports from S&P Global and the Institute for Supply Management (ISM) in May, with the latter contracting for the second consecutive month.