Gold prices fell on Thursday, after the dollar reached a 20-year high.
A drop in US Treasury yields limited the record of significant losses for the yellow metal, after US inflation data indicated that the Federal Reserve may adhere to a roadmap for raising interest rates to control inflation.
Gold prices today
By 08:12 AM GMT (11:12 AM Mecca Al Mukarramah), gold futures prices – for June delivery – decreased by 0.18%, equivalent to $3.40, to reach the level of $1850.30 an ounce.
Gold prices ended their trading yesterday, Wednesday, down by about $12, regaining strength from their lowest level in 3 months.
The spot price for the yellow metal also declined by 0.05%, at $1851.47 an ounce.
The price of silver contracts – for July delivery – also fell by 1.21%, to reach $21.32 an ounce.
The price of palladium fell by 2.82%, recording $179.22 an ounce, while the spot platinum price fell by 1.02%, at $985.36 an ounce.
The US dollar reached its highest level in nearly two decades, a milestone that it has set multiple times and has hovered around recently, which has kept pressure on demand for bullion priced in US dollars.
Inflation in America
US consumer price growth slowed sharply in April as gasoline fell from record highs, indicating that inflation is likely to have peaked.
The inflation reading comes on the heels of the Federal Reserve raising its benchmark interest rate overnight by a solid half a percentage point last week – the largest increase in 22 years – as it pushes to abandon ultra-easy monetary policy in the era of the pandemic.
Although viewed as an inflation hedge, bullion is non-interest bearing, and is sensitive to rising US short-term interest rates and bond yields.
gold market situation
“With rising inflation expectations and evidence of money flowing into gold, we were left wondering if a dip formed yesterday above $1,830,” Matt Simpson, chief market analyst at City Index, said in a note.
The benchmark 10-year Treasury yields fell for the fourth consecutive session, lowering the opportunity cost of holding gold.
There could be some support in the near term, said Brian Lane, managing director at Goldsilver Central, as investors know that once the lockdown in China is lifted, there could be more support for precious metals demand, Reuters reported.
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