Yahoo Finance Gold Prices Little Changed as Dollar Gains on Strong U.S. Inflation
Investing.com – Gold prices were little changed on Thursday as the dollar firmed against its peers after a expectation-beating inflation report reaffirmed expectations that the Federal Reserve would hike interest rates two more times this year.
The Labor Department said on Wednesday its producer price index for final demand increased 0.3% last month, compared to the expected 0.2%.
Gold futures for August delivery on the Comex division of the New York Mercantile Exchange slipped 0.01% to $1,244.30 a troy ounce by 1:45AM ET (05:45 GMT).
The U.S. Dollar Index, which tracks the greenback against a basket of currencies, was up 0.04% at 94.76.
"The U.S. dollar firmed up across the board and I think that is the main reason," a Sydney-based trader said.
"With the softer U.S. equity markets and the ongoing trade war between the U.S. and China you would think it would provide some support for gold but that has not been the case."
A stronger dollar and higher interest rates reduce demand for non-interest bearing gold as the metal becomes more expensive for holders of other currencies.
Trade concerns also remained in focus as the latest development pushed the Chinese equity markets into their worst selloff since three years ago.
On Wednesday, the Trump administration threaten to impose tariffs on $200 billion in Chinese goods. The 10% tariffs will not take effect immediately but will undergo a two-month review process.
In response, China's commerce ministry said in a statement released around midday on Wednesday that it was "shocked" by the latest U.S. trade action and urged international community to work together against the trade bullying, while calling the actions "completely unacceptable".
Related Articles
U.S. oil exports to India soar ahead of sanctions on Iran
Brent oil gains $1 to claw back some losses as Libyan exports to resume
