Gold Prices Fall as US Dollar Strength and Yields Dim Bullion Shine

Gold Prices Fall as US Dollar Strength and Yields Dim Bullion Shine
Gold Prices Fall as US Dollar Strength and Yields Dim Bullion Shine

Gold prices fell for the second straight session on Thursday, as the US dollar and Treasury yields rose ahead of key inflation data, which could provide more clarity on the rate plan. of interest of the Federal Reserve.

Spot gold was down 0.4% at $2,330.44 an ounce at 0311 GMT, after falling 1% on Wednesday.

US gold futures fell 0.5% to $2,328.60.

The dollar strengthened 0.5%, making bullion less attractive to other currency holders, while U.S. 10-year bond yields held near multi-week highs reached in the previous session.

“I think investors are realizing that the current high interest rate environment is likely to continue. And as attention turns back to U.S. yields and the dollar, some of the attention is being diverted away from gold this week,” said Tim Waterer, chief market analyst at KCM Trade.

Gold has lost more than $100 since hitting a record $2,449.89 on May 20, as upbeat remarks from Fed officials and minutes of the last meeting pointed to an extended trajectory toward the 2% inflation target.

Although bullion is considered a hedge against inflation, rising interest rates increase the opportunity cost of holding this asset without a yield.

According to the CME’s FedWatch tool, traders currently give a 59% chance of a rate cut by November.

Data on US personal consumption expenditures (PCE), the Fed’s preferred measure of inflation, is due Friday.

“I expect gold to hold on to the $2,300 mark in today’s session given support levels, but if household consumption spending data is higher, gold may struggle to maintain that level,” Waterer said.

The global mining group BHP Group has abandoned its plan to buy its rival Anglo American for an amount of 49 billion dollars.

Spot silver fell 1.7% to $31.40, platinum fell 0.3% to $1,032.25 and palladium lost 2.1% to $944.75.

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