US homebuilder sentiment tumbles as high interest rates slow buyer traffic

Gold prices climbed to a more than three-week peak on Wednesday, aided by a weaker dollar and yields after data showed the U.S. consumer price index rose less than expected in April, boosting chances of interest rate cuts by the Federal Reserve.

Spot gold rose 0.4% to $2,367.29 per ounce, as of 1322 GMT. U.S. gold futures rose 0.6% to $2,372.70.

The CPI data "could be an early indication that over time inflation will cool and the Fed will make its first interest rate cut," said Phillip Streible, chief market strategist at Blue Line Futures.

The CPI rose 0.3% last month after advancing 0.4% in March and February, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut.

Economists polled by Reuters had forecast the CPI gaining 0.4% on the month and advancing 3.4% year-on-year.

The dollar dropped 0.5% against a basket of currencies to hit its lowest in over a month, making gold more attractive for other currency holders. Benchmark 10-year Treasury yields also hit a more than one-month low. [USD/] [US/]

Technically, the gold futures bulls have the firm overall near-term technical advantage. Bulls' next upside price objective is to produce a close in June futures above solid resistance at $2,400.00, wrote Jim Wyckoff, senior analyst at Kitco Metals in a note.

Traders are now pricing in about a 69% chance of a rate cut in September, according to the CME FedWatch Tool. Lower interest rates reduce the opportunity cost of holding non-yielding gold.

Spot silver rose 1.5% to $29.03 per ounce, palladium gained 2.8% to $1,005.50 and platinum climbed 2.1% to $1,052.90, hitting a near one-year high.