Wednesday, August 17

Gold dips after US inflation data sparks jumbo rate hike concerns


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Gold prices slipped on Thursday, as

Treasury yields and the dollar rose, with bullion’s outlook hurt

by fears the Federal Reserve could go for a more aggressive

interest rate hike this month, after data showed US inflation

sky-rocketed in June.

FUNDAMENTALS

* Spot gold fell 0.4% to $1,728.39 per ounce by 0100

GMT. US gold futures dropped 0.5% to $1,726.60.

* The dollar edged up towards 20-year highs, hurting

demand for greenback-priced gold among buyers holding other

currencies.

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* Benchmark US 10-year Treasury yields rose, weighing on

Appetite for zero-yield gold.

* US annual consumer prices jumped 9.1% in June, the

sharpest spike in more than four decades, leaving Americans to

dig deeper to pay for gasoline, food, healthcare and rents.

* Markets swung wildly on Wednesday, as the euro touched

parity versus the dollar for the first time in 20 years, while

investors also feared larger Fed rate hikes could be on the way.

* The Fed is seen ramping up its battle with sky-high

inflation with a supersized 100 basis points rate hike at its

upcoming policy meeting on July 26-27.

* Although gold is seen as an inflation hedge, higher rates

hurt the appeal of bullion, which bears no interest.

* A rallying dollar sent gold prices to a near one-year low

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on Wednesday following the inflation report, but a retreat in

the greenback helped bullion make a sharp recovery and end the

session higher.

* SPDR Gold Trust , the world’s largest gold-backed

exchange-traded fund, said its holdings fell 0.17% to 1,019.79

tonnes on Wednesday from 1,021.53 tonnes on Tuesday.

* Spot silver fell 0.4% to $19.11 per ounce, platinum

slipped 0.8% to $847.75, and palladium eased 0.5%

to $1,964.74.

DATA/EVENTS (GMT)

0130 Australia Employment June

0130 Australia Unemployment Rate June

1230 US Initial Jobless Clm Weekly

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by

Rashmi Aich)



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