Gold prices varied during these moments of trading on Wednesday, after recording their largest decline in a month in the previous session, as high US inflation raised concerns about the possibility of postponing the US Federal Reserve’s interest rate cut until after June.
Michael Langford, chief investment officer at Scorpion Minerals Ltd, said the recent decline in gold prices was due to inflation data, which influences the decision-making process at the US Federal Reserve.
Langford expects a correction of about 10% in gold prices from current levels.
Gold fell 1.1 percent on Tuesday after data showed U.S. consumer prices rose more than expected in February, suggesting some stabilization in inflation. It was gold’s worst one-day drop since Feb. 13, when data showed consumer prices also rose more than expected in January.
The U.S. Bureau of Labor Statistics reported that the consumer price index rose 0.4% on a monthly basis in February and 3.2% on an annual basis. The monthly increase was in line with expectations, but the annual rate was higher than the 3.1% estimate.
More US data is due before the Fed meeting next week, with the Producer Price Index due on Thursday and the preliminary Michigan consumer confidence and inflation outlook due on Friday.
The U.S. inflation reading pushed Treasury yields and the dollar higher. The 10-year Treasury yield got an additional boost after weak demand at an auction of $39 billion of benchmark bonds.
Gold at settlement yesterday
Gold futures prices fell at the settlement of trading on Tuesday, as investors assessed data showing an acceleration in annual inflation in the United States.
At settlement, gold futures for April delivery fell 1%, or $22.5, to $2,166.1 an ounce, marking the first loss for the yellow metal in 9 sessions.
Gold and dollar now
Gold futures settled at $2,166 an ounce.
While spot gold contracts rose by about 0.1% to $2,160 an ounce.
On the other hand, the dollar index fell by about 0.03% to 102.517 points.
Other minerals
Spot platinum fell 0.1 percent to $923.45 an ounce, palladium fell 0.5 percent to $1,036.44 and silver fell 0.3 percent to $24.08.
