SINGAPORE: Gold edged lower on Thursday as the dollar’s recovery from a two-week trough hit in the previous session and a softer US inflation data dampened bullion’s appeal.
Spot gold fell 0.3% to $1,837.13 per ounce by 0636 GMT, after hitting a more than one-week high on Wednesday. US gold futures slipped 0.3% to $1,837.40.
“The dollar has rebounded from Wednesday’s low, that’s putting some pressure on precious metals. Low liquidity due to Chinese new year holiday is also weighing on the prices,” said DailyFX strategist Margaret Yang.
Gold has also lost some support as US data showed there is not much of inflation down the road, Yang said.
The US Consumer Price Index for January came in lower than expected. Gold is considered a hedge against inflation.
Investors kept a close watch on the developments on the passage of a $1.9 trillion US relief bill.
“It’s quite a mixed narrative right now,” said Stephen Innes, chief global market strategist at financial services firm Axi.
“Too much stimulus in the market could force the Fed to tighten the monetary policy, that’s negative for gold, but if the stimulus isn’t big enough, gold is not going to benefit.”
Comments
Comments are closed.