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PRECIOUS-Gold eases as higher yields weigh before U.S. inflation data

reuters.com · 06/09/2022 20:48
PRECIOUS-Gold eases as higher yields weigh before U.S. inflation data

- Gold edged down on Friday and headed for a weekly fall, as Treasury yields rose, with investors awaiting key monthly U.S. inflation data that is due later in the day for cues on the future of monetary policy.


FUNDAMENTALS

* Spot gold XAU= was down 0.1% at $1,846.22 per ounce, as of 0038 GMT, while U.S. gold futures GCv1 eased 0.2% to $1,849.10.

* Gold prices have fallen about 0.2% so far this week.

* Benchmark U.S. 10-year Treasury yields US10YT=RR edged up, hurting demand for zero-yield gold. US/

* Economic data expected on Friday has market participants anxiously waiting for confirmation that decades-high inflation reached its summit in March and has commenced its long hike back down the mountain. nL1N2XW1WK

* The U.S. Federal Reserve will hike its key interest rate by 50 basis points in June and July, with rising chances of a similar move in September, according to a Reuters poll of economists who see no pause in rate rises until next year. nL4N2XV2G3

* Bullion is often seen as an inflation hedge, but the opportunity cost of holding it is higher when the Fed raises short-term interest rates to combat inflation.

* The number of Americans filing new claims for unemployment benefits increased to the highest level in nearly five months last week, but that likely does not mark a material shift in labour market conditions, which remain extremely tight. nL1N2XW16C

* The European Central Bank ended a long-running stimulus scheme on Thursday and said it would deliver next month its first interest rate hike since 2011, followed by a potentially larger move in September. nL1N2XW0AB

* Spot silver XAG= dipped 0.1% to $21.65 per ounce, and platinum XPT= fell 0.5% to $966.13, while palladium XPD= rose 0.2% to $1,928.17. All are on course for weekly declines.


DATA/EVENTS (GMT)


0130 China PPI, CPI YY May

1230 US CPI MM, SA May

1400 US U Mich Sentiment Prelim June



(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Shailesh Kuber)

((BharatGovind.Gautam@thomsonreuters.com; +91-80-6182-3021/ 3590 (If within U.S. call 651-848-5832 );))