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PRECIOUS-Gold falls as yields, dollar firm ahead of U.S. inflation data

reuters.com · 06/09/2022 10:53
PRECIOUS-Gold falls as yields, dollar firm ahead of U.S. inflation data

U.S. consumer inflation data due on Friday

Platinum falls over 3%

U.S. dollar up 0.6%

Updates prices

By Kavya Guduru

- Gold prices fell on Thursday as elevated U.S. Treasury yields and a firm dollar dimmed bullion's appeal in the run-up to U.S. inflation data that could strengthen the case for aggressive policy tightening by the Federal Reserve.

Spot gold XAU= was down 0.3% at $1,848.49 per ounce by 1:57 p.m. EDT (1757 GMT), while U.S. gold futures GCv1 fell 0.2% to $1,852.80.

"The ECB signalled they're going to start raising rates in July and continue to raise rates. It has gold trading a little lower ... Feels like there's some risk off in the markets that's spilling over into gold too, plus the bond yields are up a little bit," said Bob Haberkorn, senior market strategist at RJO Futures.

The ECB said it will end bond buys on July 1 and raise rates by 25 basis points later in the month. It will hike again in September and may opt for a bigger move then, if the inflation outlook fails to improve. nL1N2XW0AB

U.S. yields rose, increasing the opportunity cost of holding non-yielding gold, while the dollar firmed .DXY, making gold less appealing for overseas buyers. US/USD/

"Tomorrow's inflation print has gathered substantial attention, but with the next few Fed hikes set in stone, the immediate relevance of data releases is limited," TD Securities wrote in a note.

"Instead, market participants will be honed-in on any information that could inform the Fed's decision-making process post-September."

The core consumer price index (CPI) is expected to have risen 5.9% on the year, after an annual rise of 6.2% in April, according to a Reuters poll.

The CPI data due Friday could offer clues on whether the Fed will continue its aggressive tightening in the second half of the year.

Spot silver XAG= slipped 1.2% to $21.76 per ounce, platinum XPT= dropped 3.2% to $973.59, while palladium XPD= fell 1% to $1,924.02.

(Reporting by Kavya Guduru in Bengaluru;
Editing by Vinay Dwivedi)