Gold News Update

Gold gains ground on strong U.S. inflation data, weaker dollar

1 Mins read

Gold prices bounced off a more than
one-week low on Tuesday after data showing a sharp rise in U.S. inflation bolstered bullion’s appeal as an inflation hedge and weighed on the dollar

Spot gold climbed 0.8% to $1,745.94 per ounce by 1:42 p.m. EDT (1742 GMT), after earlier dipping to $1,722.67, its lowest mark since April 5. U.S. gold futures settled up 0.9% at $1,747.6.

“We needed to see some inflation to get gold moving and we saw it this morning with that CPI number,” said Bob Haberkorn, senior market strategist at RJO Futures, adding that a weaker dollar and retreating yields supported prices further.
U.S. consumer prices rose by the most in more than 8-1/2 years in March, kicking off what most economists expect will be
a brief period of higher inflation.

The U.S. dollar slipped to three-week lows after the data, making gold cheaper for holders of other currencies, while benchmark 10-year Treasury yields also eased.

Further supporting safe-haven gold were concerns raised by U.S. health officials’ decision to recommend a pause in the use
of Johnson & Johnson’s COVID-19 vaccine, analysts said.

“At the moment we need to see decisive breakout above $1,765 in order to spark another wave of buying up to $1,800,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

“The $1,750 level has been a strong resistance, so we’re getting up near that level,” he said, adding that geopolitical
risk tied to news of Iran stepping up its nuclear enrichment had also sparked a lot of buying of gold and silver.

Among other precious metals, silver rose 2% to $25.34 per ounce. Palladium gained 0.7% to $2,695.58 after climbing to its highest level since March 18 at $2,710.
Platinum fell 0.9% to $1,158.98 per ounce, having earlier dipped to its lowest price in two weeks at $1,151.86

Reporting by Shreyansi Singh and Eileen Soreng in Bengaluru
Editing by Paul Simao and Matthew Lewis)

Source : Reuters

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