Gold prices fall in anticipation of US inflation data

  • 10 June, 2022
  • 3:31 pm EEST

Gold prices fell, during trading today, Friday, June 10, 2022, and are heading to record a slight weekly decline with the rise in US Treasury bond yields.

This comes as investors await key monthly inflation data in the US, for clues about the future of the Federal Reserve’s monetary policy.


Gold Prices Today

The price of gold futures contracts – August delivery – decreased by 1.14%, to reach the level of $ 1827.90 an ounce.

Gold prices ended their trading on Thursday with a decline for the first time in 3 consecutive sessions, with the rise of the dollar and US Treasury bond yields.

The price of immediate delivery of the yellow metal decreased by 0.14%, to reach $ 1845.33 an ounce, according to data seen by the specialized energy platform.

Gold prices are down 0.3% so far this week.

On the other hand, the price of silver futures contracts – for July delivery – decreased by 1.75%, at $21.32 an ounce.

The spot platinum price fell by 0.77%, at $964.85 an ounce, and the spot palladium price fell 0.52%, at $1,901.79 an ounce.


US Bonds

US 10-year Treasury yields held near one-month highs, hurting demand for zero-yield gold.

US Consumer Price Index data, due later today, made market participants anxiously await confirmation that decades of high inflation peaked in March.


Inflation In America

“The market is very much in consolidation this week ahead of tonight’s headline US CPI, which could weigh heavily on the Fed after September,” said Stephen Innes, managing partner at SBI Asset Management.

He added, “A strong CPI reading could indicate more aggressive monetary policy tightening by the Federal Reserve, and see gold prices test $1,825 and push the precious metal as low as $1,800, but a benign reading could have the opposite effect.”

The Federal Reserve will raise its key interest rate by 50 basis points in June and July, with chances of a similar move increasing in September, according to a Reuters poll of economists who see no pause in rate hikes until next year.

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


Interest Rates

“Tight central banks, high real interest rates and a strong dollar have taken the gold market out,” ANZ analysts said.

They added that the unprecedented withdrawal of financial and monetary support is weighing on sentiment.






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