Investing.com – Gold prices were mostly flat on Thursday with trading restricted to a narrow range as traders mulled over recent data pointing to growing inflationary pressure which could strengthen the Federal Reserve’s case for a faster pace of monetary policy tightening.
for April delivery on the Comex division of the New York Mercantile Exchange fell by $2.40, or 0.18%, to $1,355.50 a troy ounce.
In what was mostly a range bound session gold prices struggled to capitalise on dollar weakness as traders grew wary of adding to recent bullish bets on the yellow metal after upbeat wholesale inflation reaffirmed the narrative of improving US inflation.
The Labor Department said Thursday its for final demand increased 0.4% last month after slipping 0.1% in December. In the 12 months through January, the PPI rose 2.2%.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand for the precious metal.
Also supporting gold prices was a uptick in Far East demand ahead of as the Chinese New Year got underway which usually ushers in gift buying in the form of gold jewellery. The biggest demand for gold is for use in gold jewellery which accounts for roughly 50% of total demand, according to the World Gold Council.
“Based on the local premiums to international gold prices, it appears that demand ahead of the Chinese New Year has been relatively strong,” Capital Economics analyst Simona Gambarini said earlier this week in an email to clients.
In other precious metal trade, fell 0.49% to $16.80 a troy ounce, while gained 0.35% to $1,002.60
rose 0.31% to $3.25, while fell 0.62% to $2.57. The fall in natural gas comes despite EIA data showing storage levels fell last week confounding expectations for a rise.
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Source: Investing.com