02:00 PM EDT, 05/15/2024 (MT Newswires) -- (Updates prices.)

Gold prices traded higher midafternoon on Wednesday as a report showed US inflation rose less than expected last month, reviving hopes the Federal Reserve will be able to begin lowering interest rates this year and pushing down the dollar and yields.

Gold for June delivery was last seen up US$35.60 to US$2,395.50 per ounce.

The US Bureau of Labor Statistics on Wednesday reported the April consumer-price index rose by 0.3% from March, down from a rise of 0.4% a month earlier and under the consensus estimate for a 0.4% rise, according to Marketwatch. The core index, which excludes volatile food and energy prices, rose 3.6% annualized, matching expectations and down from a 3.8% pace in March.

Retail sales in the United States were unchanged in April from March, well under the consensus estimate for a 0.4% rise, adding evidence of a slowing economy and raising hopes interest rates could be lowered this year, despite a day-prior report that showed producer prices rose more than expected last month.

The dollar fell following the reports, making gold more affordable for international buyers. The ICE dollar index was last seen down 0.68 points to 104.32, the lowest since April 9.

Treasury yields also fell on expectations lower interest rates are on the horizon, bullish for the metal since it offers no interest. The US two-year note was last seen paying 4.741%, down 7.6-basis points, while the yield on the 10-year note was down 9.4 basis points to 4.348%.