Gold Falls as Dollar and Yields Rise Ahead of Inflation Data
Gold prices fell on Thursday as the US dollar and bond yields rose ahead of key inflation data. Spot gold slipped 0.4% to $4,385.40 per ounce by 1125 GMT, while US gold futures dropped 0.7% to $4,427.80.
Fawad Razaqzada, a market analyst at Forex.com, attributed the decline in metals prices to the strengthening US dollar and rising bond yields. 'I think part of the drop in metals prices is to do with the U.S. dollar coming back, ahead of inflation data,' he said.
The US dollar index gained, making greenback-priced bullion more expensive for buyers overseas. Markets are awaiting US producer price index data due at 1230 GMT, followed by consumer price inflation data on Friday.
Rising bond yields typically pressure gold as they increase the opportunity cost of holding the non-yielding asset. A majority of economists polled by Reuters expect the Fed to hold interest rates steady at its September 15-16 meeting and for the rest of this year.