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Gold breaks bullish streak awaiting US inflation data

Gold breaks bullish streak awaiting US inflation data
Gold breaks bullish streak awaiting US inflation data

This Wednesday the Consumer Price Index (CPI) in the United States will be released. Economists polled by Reuters expect a 5.5% year-on-year rise in core consumer prices for April.

Reuters

The prices of gold fell on Wednesday, after rising in the two previous sessions as investors braced for April US inflation data, which could influence the Federal Reserve’s interest rate policy.

Spot gold was down 0.3% at $2,028.87 an ounce, while US gold futures were down 0.3% at $2,036.70.

This Wednesday the Consumer Price Index (CPI) in the United States will be released. Economists polled by Reuters expect a 5.5% year-on-year rise in core consumer prices for April.

“Today’s losses in gold prices are mainly due to the dollar covering that started in the European session,” said Ricardo Evangelista, a senior analyst at ActivTrades, adding that if inflation is at forecast levels, it will not a significant impact on the bullion is expected.

The dollar gained 0.1%. A stronger US currency makes gold purchases less favorable for foreign investors. Fed Chairman Jerome Powell has said it is now an open question whether further rate hikes will be justified in an economy still facing high inflation but also showing signs of slowing.

Although gold is seen as a hedge against inflation, rising rates make the metal, which does not earn interest, less attractive.

In other precious metals, spot silver fell 0.3% to $25.55 an ounce; platinum was stable at $1,104.34; and palladium was up 0.2% at $1,573.38.

Source: Ambito

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