Gold ends with gains for third straight week as US inflation falls, economic concerns grow

gold corrected lower on Friday following three straight days of gains which had pushed it to the highest level since May 22. The metal closed with a slight loss of 0.11% at $2411 on Friday as it rose for the third straight week. It was up 0.83% on the weekly closing basis.

The US bond yields/Dollar Index

The US yields and the US Dollar Index slumped to multi-week lows on the subdued US CPI inflation data (June). The ten-year US yields slid 0.60% on Friday as the yields fell around 2% on the week. The two-year yields, more sensitive to monetary policy, were down nearly 3% on the week. The US Dollar Index was down about 0.80% this week.

Data round-up

US CPI inflation data trailed the forecast on all the counts as rents, the sticky component moderated. CPI m-o-m came in at -0.10% (forecast 0.10%), CPI ex food and energy m-o-m at 0.10% (forecast 0.20%), CPI y-o-y at 3% (forecast 3.10%), and CPI ex food and energy y-o-y was noted at 3.30%(forecast 3.40%).

The US PPI data, released on Friday, was noted at 2.6% y-o-y, (forecast 2.3%). PPI m-o-m showed a rise of 0.2% in June (forecast 0.1%). The PPI ex food and energy was above the forecasts on both the m-o-m and y-o-y basis. University of Michigan consumer confidence trailed the forecast; however, inflation expectations were lower than the estimates.

Powell's testimony

The US Federal Reserve Chair Powell in his two-day testimony to the Senate Banking Committee and House financial services sounded more positive on rate cuts. He said that the Fed will not wait for the