Gold Prices Claw Back Losses Despite Dollar Strength

Investing.com – Gold prices clawed back some of their losses shrugging off a move higher in the dollar and a surge in bond yields.

for June delivery on the Comex division of the New York Mercantile Exchange fell by $4.70, or 0.34%, to $1,348.90 a troy ounce.

Gold prices remained above their lows of $1,348.50 as traders continued to support the precious metal despite economic data pointing to inflationary pressures, spurring bond yields and the dollar higher.

The rose above 2.9% as traders bet that inflation and economic growth would remain firm in the wake of stronger Philly Fed data signalling a continued expansion in input prices.

The Philadelphia Fed said Thursday its rose to a reading of 23.2, a three-month high, from 20.8 in April.

Investors’ outlook on inflation was also bolstered by the Federal Reserve’s Beige Book report released Wednesday, suggesting that consumer inflation could be set on a path higher as rising input costs were expected to be passed onto consumers.

Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.

Positive sentiment on gold prices seen last week has eased somewhat as safe-haven demand dropped after U.S. military action in Syria was less extensive than some had feared while U.S.-North Korea tensions calmed.

U.S. President Donald Trump said on Wednesday he hoped a summit with North Korean leader Kim Jong Un would be successful.

In other precious metal trade, rose 0.07% to $17.26 a troy ounce, while fell 0.68% to $939.40 an ounce.

fell 0.97% to $3.13.

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