Gold Prices Fall In Asia As Chinese New Year Holidays Start

Gold Prices Fall In Asia As Chinese New Year Holidays Start© Reuters. Gold dips in – Gold dipped in Asia on Thursday as top buyer China started a market break through Feb. 21 to mark the Lunar New Year and physical trade dipped further with also shut and on holidays Friday and Monday.

for April delivery on the Comex division of the fell 0.11% to $1,356.50 a troy ounce.

Overnight, rose sharply amid dollar weakness as data showing rising inflation and falling retail sales stoked stagflation fears as market participants questioned the underlying strength of inflation.

The said Wednesday its Consumer Price index rose 0.5% last month after rising 0.2% in December, while year-on-year grew to 1.8% from 1.8% in July.

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The Commerce Department, meanwhile, said on Wednesday that retail sales fell 0.3% last month, confounding expectations for a 0.3% rise.

Rising inflation and falling retail sales pointing to possible sluggishness in consumer spending, leading some market participants to slash their bullish expectations for first quarter economic growth as JPMorgan (NYSE:) revised down its first quarter US forecast to 2.5% from 3%.

Others, meanwhile, noted that the upbeat inflation report was mainly driven by an increase in apparel and medical services prices and questioned whether these two components would continue to post strong gains in the months ahead.

The duo of reports saw spreads between long-dated and short-dated bond yields narrow and an almost immediate slump in the dollar from the highs. TD securities said this could have been a factor of the market looking at “firmer inflation alongside a weak retail sales report, deducing stagflation.”

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.

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