By 0231 GMT, spot gold increased 0.4% to $1,940.53 per ounce, its highest level since June 20.
As investors awaited U.S. inflation statistics that may provide additional hints on the Federal Reserve’s rate-hike policy path, gold prices increased on Wednesday as the dollar and bond rates declined.
By 0231 GMT, spot gold increased 0.4% to $1,940.53 per ounce, its highest level since June 20.
At $1,946.00, U.S. gold futures were up 0.5%.
The dollar index dropped 0.2% to its lowest level since May 11, making gold more affordable for owners of foreign currencies. Standard 10-year U.S. Treasury yields decreased as well, falling to their lowest level in almost a week.
According to Yeap Jun Rong, market strategist at IG, “there has been some renewed confidence in gold prices lately, given the broad expectations for the upcoming U.S. CPI to reflect further moderation in pricing pressures.”
After May’s 4% increase, economists surveyed anticipate June’s inflation data, which is due at 1230 GMT, to rise by 3.1%. This would be the lowest number since March 2021. Core rates are anticipated to have fallen from 5.3% to 5%, but they are still much higher than the Fed’s goal rate of 2%.
According to CME’s Fedwatch tool, the market expects the Fed to increase rates by 25 basis points during its policy meeting on July 25–26.
The opportunity cost of owning non-yielding bullion rises as interest rates rise.
While a few Fed officials claimed on Monday that the organisation was almost done tightening its monetary policy, Fed Bank of New York President John Williams reaffirmed on Tuesday that the organisation was still hiking its short-term rate objective.
However, given that a 25 bps hike is already highly anticipated and that inflation is generally trending downward, Rong warned that “a significant beat in inflation numbers (could) drive a pronounced recalibration in rate pricing.”
Silver spot prices increased by 0.7% to $23.26 an ounce, platinum increased by 0.5% to $929.21, and palladium increased by 0.2% to $1,253.61.