Gold prices edge up from 2-week low as inflation worries persist

By Seher Dareen

gold
Photo: Unsplash/Jingming Pan
Reuters
2 min read Last Updated : Jun 01 2022 | 10:32 PM IST

By Seher Dareen

(Reuters) - Gold prices inched up from a two-week low on Wednesday, supported by worries over rising inflation, although a stronger dollar and rising U.S. yields kept gains in check.

Spot gold rose 0.3% to $1,842.83 per ounce by 1516 GMT, earlier hitting its lowest since May 19 at $1,827.80. U.S. gold futures fell 0.1% to $1,846.50.

"The underlying theme of the gold market is still worrisome inflation, which is probably going to keep a floor under the market and prompt a little bit more buying interest," Kitco senior analyst Jim Wycoff said

"We're seeing some short covering in the futures market and little bit of bargain hunting in the cash market after the recent selling pressure."

However, making gold more expensive for holders of other currencies, the dollar index gained 0.3%, while U.S. Treasury yields also rose. [USD/] [US/]

Euro zone inflation data was much higher than expected on Tuesday, increasing pressure on the European Central Bank ahead of its policy meeting next week.

Investors are also looking ahead to U.S. nonfarm payrolls data and May's inflation data for clues into the economy and outlook for the Federal Reserve's policy tightening path.

Markets have priced half-point interest rate rises from the Fed this month and next, although uncertainty clouds about the outlook beyond that.

Bullion is considered a hedge against inflation and a safe haven during times of political and economic uncertainty. However, higher interest rates increase the opportunity cost of holding gold and boosts the dollar.

"As the year unfolds, we expect gold prices to revert to taking their cue primarily from real yields and trend lower, albeit remain elevated compared to historical levels," Standard Chartered said in a note.

Spot silver rose 1.1% to $21.76 per ounce, having hit a two-week low earlier.

Platinum rose 2.6% to $989.34, and rose as much as 4.4% to $1,006.93 earlier. Palladium was up 0.5% to $2,009.93.

(Reporting by Seher Dareen in Bengaluru;Editing by Amy Caren Daniel)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

Topics :Gold Pricesglobal inflationEconomic Crisis

First Published: Jun 01 2022 | 10:32 PM IST

Next Story