Gold Prices Dip After Inflation, Labor Data

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Investing.com – turned around and traded lower after inflation and labor data released on Thursday were stronger than expected, dampening expectations for aggressive policy easing from the Federal Reserve.

for August delivery on the Comex division of the , dipped 45 cents to $1,412.08 a troy ounce by 10:43 ET (14:43 GMT). Although little changed from the prior day’s close, that was down from an intraday high of $1,428.95 before the data.

, that exclude volatile food and energy costs, in June, according to data released on Thursday. The unexpected tick higher to 2.1% pushes the reading slightly past the Federal Reserve’s target of 2.0%.

“It would of course be ironic if inflation became interesting just as the Fed was abandoning such concerns,” said Timothy Duy, director of the Oregon Economic Forum.

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Federal Reserve Chairman Jerome Powell said in on Wednesday that he was concerned weak inflation would be more persistent than anticipated, while also raising concerns of economic uncertainty from ongoing trade disputes.

Duy said that Powell “effectively confirmed that the Fed intended to cut rates at the end of this month. The Fed is taking out insurance against increasing downside risks given that the of that insurance is cheap given low inflation.”

Powell is currently delivering the to the Senate Banking Committee on Thursday.

The number of Americans filing applications for unemployment benefits dropped to a last week.

Weekly added to signs of a strong U.S. labor market, after the monthly jobs report scaled back expectations for more aggressive policy easing.

“Financial market uncertainty and accommodative monetary policy will likely support gold investment demand,” the World Gold Council said its mid-year outlook released Thursday.

In other metals trading, lost 0.3% to $15.188 a troy ounce by 10:43 AM ET (14:43 GMT).

lost 1.9% to $1,558.75 an ounce, while sister metal fell 0.3% to $827.70.

In base metals, traded down 0.5% to $2.680 a pound.

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Source: Investing.com