Gold hits 4-week low as dollar firms before US inflation test
Gold hit a four-week low on Tuesday as the dollar climbed after weaker-than-expected Chinese trade data, while caution in the run-up to U.S. inflation readings this week also kept appetite for zero-yield bullion subdued.Spot gold was down 0.4% to $1,928.61 per ounce by 1200 GMT after hitting its lowest since July 11. U.S.
gold futures fell 0.4% to $1,963.00. «China's weak trade data has resulted in a general risk-off sentiment. The haven of choice today has been the greenback, which has put pressure on the precious metal,» said FXCM market specialist Russell Shor.
The dollar gained 0.6% but losses for dollar-priced bullion were capped by a downturn in benchmark 10-year Treasury yields from November 2022 highs hit on Friday. [USD/] [US/] «Gold prices remain under pressure from the recent rise in U.S. bond yields and after Fed's Bowman said more rate hikes may be needed,» said Saxo Bank's head of commodity strategy Ole Hansen.
Fed Governor Michelle Bowman on Monday outlined the likely need for additional rate hikes to lower inflation to the Federal Reserve's 2% target, while New York Fed chief John C. Williams expected that rates could begin to come down next year. «The sixty-four-dollar question this week is the U.S.
inflation outcome,» said Clifford Bennett, chief economist at ACY Securities. A hotter-than-expected CPI number on Thursday could raise the possibility of another rate hike in September. «The market already knows headline inflation is trending lower, but any firmness in the data could be a fresh downward catalyst for gold in the short term,» Bennett added.
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