Firm dollar keeps gold subdued

25 June, 2021 12:00 AM printer

BENGALURU: Gold prices edged lower on Thursday as a stronger dollar dented the metal’s appeal, while investors awaited more US economic data due this week to gauge inflationary pressures.

Spot gold was down 0.1 per cent to US$1,777.26 per ounce by 1.16am GMT, report agencies.

US gold futures eased 0.2 per cent to US$1,779.50 per ounce.

The dollar index held firm below an 11-week high against its rivals, making gold more expensive for holders of other currencies.

A period of high inflation in the United States may last longer than anticipated, two US Federal Reserve officials said, prompting one to pull forward his views on when the central bank should start raising interest rates.

Gold is often seen as a hedge against inflation, though a rate hike by the Fed will increase the opportunity cost of holding bullion and dull its appeal.

Data on Wednesday showed sales of new US single-family homes fell to a one-year low in May as the median price of newly built houses soared amid expensive raw materials, including framing lumber.

Investor focus has now shifted to US producer price inflation data on Friday, apart from jobless claims on Thursday and consumer spending on Friday.

Euro zone business growth accelerated at its fastest pace in 15 years this month as the easing of more lockdown measures drove a boom in the bloc’s dominant services industry, a survey showed.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3 per cent to 1,046.65 tonnes on Wednesday.

Silver was steady at US$25.87 per ounce, palladium eased 0.1 per cent to US$2,614.04. Platinum climbed 0.5 per cent to US$1,089.