ReutersGold prices neared a nine-month low on Tuesday, as the U.S. dollar strengthened to its highest level in 20 years, stifling demand for greenback-priced bullion. FUNDAMENTALS Spot gold was down 0.1% at $1,732.17 per ounce at 0050 GMT. U.S. gold futures dipped 0.1% to $1,730.80.
The dollar sat near a fresh 20-year high touched on Monday, making gold more expensive for buyers holding other currencies. Gold prices dropped to their lowest level since Sept. 30 of $1,730.42 per ounce in the previous session. World equities fell on Monday as investors prepare for fresh monthly inflation data that may be seen as potentially influencing the Federal Reserve's path ahead for interest-rate increases.
U.S. consumer price index data, a key measure of inflation, is due on Wednesday, and is expected to show prices rose by 8.8% in June from a year earlier. Recent inflation data "has not been as encouraging as I would have liked," Atlanta Fed president Raphael Bostic said on Monday, saying that the lack of month-to-month improvement in the pace of price increases warrants another 0.75 percentage point increase in the federal funds rate when policymakers meet later this month.
Higher interest rates and bond yields increase the opportunity cost of holding non-yielding bullion. Benchmark U.S. 10-year Treasury yields steadied after a dip on Monday. Euro zone finance ministers said on Monday the fight against inflation was the current priority despite dwindling growth in the bloc, as they were informed of a deteriorating economic outlook by the European Commission. Spot silver fell 0.2% to $19.04 per ounce, platinum dipped 7% to $887.89, and palladium dropped 1.3% to $2,133.14.
DATA/EVENTS (GMT)
0900 Germany ZEW Economic Sentiment July
0900 Germany ZEW Current Conditions July
1200 India Industrial Output YY May
The dollar sat near a fresh 20-year high touched on Monday, making gold more expensive for buyers holding other currencies. Gold prices dropped to their lowest level since Sept. 30 of $1,730.42 per ounce in the previous session. World equities fell on Monday as investors prepare for fresh monthly inflation data that may be seen as potentially influencing the Federal Reserve's path ahead for interest-rate increases.
U.S. consumer price index data, a key measure of inflation, is due on Wednesday, and is expected to show prices rose by 8.8% in June from a year earlier. Recent inflation data "has not been as encouraging as I would have liked," Atlanta Fed president Raphael Bostic said on Monday, saying that the lack of month-to-month improvement in the pace of price increases warrants another 0.75 percentage point increase in the federal funds rate when policymakers meet later this month.
Higher interest rates and bond yields increase the opportunity cost of holding non-yielding bullion. Benchmark U.S. 10-year Treasury yields steadied after a dip on Monday. Euro zone finance ministers said on Monday the fight against inflation was the current priority despite dwindling growth in the bloc, as they were informed of a deteriorating economic outlook by the European Commission. Spot silver fell 0.2% to $19.04 per ounce, platinum dipped 7% to $887.89, and palladium dropped 1.3% to $2,133.14.
DATA/EVENTS (GMT)
0900 Germany ZEW Economic Sentiment July
0900 Germany ZEW Current Conditions July
1200 India Industrial Output YY May
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