Gold rises from three-month low as dollar drops before CPI data

Gold added 0.5% to $1 847.27 an ounce as of 9:32 a.m. in London, paring this week’s decline to 1.9%.
Image: Akos Stiller/Bloomberg

Gold rose from near a three-month low as the dollar declined with Treasury yields ahead of closely-watched US inflation data.

Bullion has been under pressure as the Federal Reserve tightened monetary policy to fight accelerating consumer-price gains. That helped push bond yields higher and has propelled a gauge of the US currency up around 5% since the end of March, making the non-interest bearing precious metal less attractive.

On Wednesday the dollar eased back after four straight days of gains. Benchmark 10-year Treasury yields also declined, supporting gold.

US inflation figures due Wednesday may provide more clues on the pace of the Fed’s interest-rate path. A lower than expected reading may soften concerns about an aggressive hiking cycle, which have hurt gold in recent weeks.

“The main cause of gold’s struggles is the ongoing rise in the dollar,” said Nicholas Frappell, global head of institutional markets at ABC Refinery in Sydney. “I take this as a continuation of risk aversion over a number of concerns, ranging from equity indexes, and China’s Covid Zero policy impacting on wider commodities and energy.”

Gold added 0.5% to $1 847.27 an ounce as of 9:32 a.m. in London, paring this week’s decline to 1.9%. The Bloomberg Dollar Spot Index slipped 0.3%. Platinum gained, while palladium declined. Silver also advanced after closing at the lowest since July 2020 on Tuesday.

The technical picture for silver is quite poor and there’s “scope for a really large move lower,” although it might start to attract dip-buying, according to ABC’s Frappell.

© 2022 Bloomberg

COMMENTS   0

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

SEARCH COMPANIES
Enter company name or share code:

ECONOMIC DATA  

  CPIThe Consumer Price Index (CPI) measures monthly changes in prices for a range of consumer products Apr 2022 5.90%
  CPI ex OERThe Consumer Price Index excluding Owners’ Equivalent Rent (CPI ex OER) measures monthly changes in prices for a range of consumer products excluding Owners’ equivalent rent that measures changes in the cost of owner-occupied housing Apr 2022 6.40%
  RepoThe rate at which the Reserve Bank lends money to the country’s commercial banks and set by the Reserve Bank’s Monetary Policy Committee. May 2022 4.25%
  Prime lendingThe Prime Lending Rate is the rate of interest that commercial banks will charge their clients when issuing a loan (home loan or vehicle finance) May 2022 7.75%

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.
INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: