Latest News

Gold falls from over a two-month high, inflation reports are in focus

Gold falls from over a two-month high, inflation reports are in focus
Gold falls from over a two-month high, inflation reports are in focus

Investors are focusing on upcoming inflation figures for clues about the U.S. rate outlook.

Gold spot was down 0.5% at $4,365.65 an ounce as of 0726 GMT after reaching its highest level since the June 5 session earlier in that session.

U.S. Gold Futures remained steady at $4,424.90.

Ahmad Assiri is a Research Strategist for Pepperstone. He said that the move up in gold's early session trading above $4,400 was primarily driven by renewed flows and a "notable" shift in metal market sentiment.

If this change in sentiment continues to attract more flows, it will be a key factor determining whether or not gold can consolidate at $4,400 and potentially extend its recovery to higher levels.

After last week's disappointing July U.S. job data, markets lowered their bets on the Federal Reserve raising rates in September.

The Federal Reserve held rates at the same level during its meeting in July, although three officials were against a rate increase.

Gold tends to be supported by lower interest rates as it pays no interest.

If the data continues to show a cooling in the economy, without a meaningful resurgence of inflation, then markets may reduce expectations that tighter policies will be implemented. Fawad Rasaqzada is a Forex.com market analyst. He said that this would likely 'leave dollar vulnerable' and give gold a supportive background.

In a rhetorical escalation that is likely to complicate efforts to reopen the Strait of Hormuz, U.S. president Donald Trump has responded 'to Iran's demands for a deal by demanding that Iran pay compensation for those killed in wars, protests and attacks.

Silver spot fell by 1.9%, to $64.49; platinum dropped 0.5%, to $1744.25; and palladium dropped 0.7%, to $1373.09. (Reporting and editing by Ashitha Shivprasad, Bengaluru. Subhranshu Sahu, Mrigank Dhaniwala).

(source: Reuters)