Gold fell on Thursday as elevated U.S.
Treasury yields and a firm dollar dimmed its appeal in the
run-up to U.S. inflation data that could strengthen the case for
aggressive policy tightening by the Federal Reserve.
Spot gold was down 0.5% at $1,844.67 per ounce by
11:58 a.m. EDT (1558 GMT), while U.S. gold futures fell
0.5% to $1,847.20.
“The ECB signaled they’re going to start raising rates in
July and continue to raise rates. It has gold trading a little
lower … Feels like there’s some risk off in the markets that’s
spilling over into gold too, plus the bond yields are up a
little bit,” said Bob Haberkorn, senior market strategist at RJO
The ECB said it will end bond buys on July 1 and raise rates
by 25 basis points later in the month. It will hike again in
September and may opt for a bigger move then, if the inflation
outlook fails to improve.
U.S. yields rose, increasing the opportunity cost of holding
non-yielding gold, while the dollar firmed , making gold
less appealing for overseas buyers.
“Tomorrow’s inflation print has gathered substantial
attention, but with the next few Fed hikes set in stone, the
immediate relevance of data releases is limited,” TD Securities
wrote in a note.
“Instead, market participants will be honed-in on any
information that could inform the Fed’s decision-making process
The core consumer price index (CPI) is expected to have
risen 5.9% on the year, after an annual rise of 6.2% in April,
according to a Reuters poll.
The CPI data due Friday could offer clues on whether the Fed
will continue its aggressive tightening in the second half of
Spot silver slipped 1.7% to $21.66 per ounce,
platinum dropped 3.4% to $971.72, while palladium
fell 0.6% to $1,930.52.
(Reporting by Kavya Guduru in Bengaluru;
Editing by Vinay Dwivedi)