Gold made up for early losses after US inflation data showed that domestic prices were rising slightly faster than expected, leading to lower real Treasury yields.
US consumer price increase The index in May extends the monthly growth of inflation, which risks strengthening as the economy strengthens. Real profitability declined after the release of the data due to strong inflationary expectations, which increased the attractiveness of interest-free bullion.
The data came after the European Central Bank updated a commitment to support faster bond purchases in emergencies. Gold was also helped by speculation that the rise in the US price index would not be enough to force the Federal Reserve to change its dovecote, says Carsten Fritsch, an analyst at Commerzbank AG.
Traders will now focus on next week’s Fed meeting and annual meeting in Jackson Hole, Wyoming, according to Paul Wong, market strategist at Sprott Asset Management. Investors are trying to gauge how long inflation can heat up before the Fed slumps, Wong said.
Spot gold rose 0.5% to $ 1,897.64 an ounce at 3:32 pm in New York after falling 1% earlier. Comex futures for August delivery rose less than 0.1% to $ 1,896.40. Spot silver and platinum rose, while palladium fell. The Bloomberg Spot Dollar Index fell 0.2%.
– With the assistance of Eddie Spence