Gold prices slipped for a second consecutive session on Thursday as the U.S. dollar and Treasury yields edged higher, while investors awaited key U.S. inflation data later this week.
Spot gold eased 0.2% at $2,334.06 per ounce as of 0733 GMT, after falling 1% on Wednesday. U.S. gold futures fell 0.4% to $2,332.70.
The dollar was at an over two-week peak, making the greenback-priced bullion less attractive for other currency holders, while the benchmark U.S. 10-year bond yield lingered near multi-week highs. [USD/][US/]
“I think it’s a case of investors realising that the current high interest rate environment is likely to have an extended stay,” said Tim Waterer, chief market analyst at KCM Trade.
“And with the focus again turning to chasing U.S. yields and dollar, some attention is taken away from gold this week.”
Bullion has dropped more than $100 since it hit a record high of $2,449.89 on May 20 as hawkish remarks from Federal Reserve officials and minutes of its last meeting pointed to a prolonged path to the 2% inflation target.
Bullion is considered a hedge against inflation, but higher rates increase the opportunity cost of holding the non-yielding asset.
Traders are currently pricing in about a 47% chance of a rate cut by September compared to 60% before the Fed minutes, according to the CME FedWatch Tool.
Investors are awaiting the U.S. core personal consumption expenditures (PCE) data, the Fed’s preferred measure for inflation, on Friday for clues on the central bank’s monetary policy trajectory.
“I expect gold to probably hold onto the $2,300 handle during today’s session given the support levels, however any upside beat from the core PCE could see gold struggling to maintain that level,” Waterer said.
Global mining group BHP Group walked away from its $49 billion plan to take over rival Anglo American. Spot silver fell 1.4% to $31.50, platinum was down 0.5% at $1,030.05 and palladium lost 2.3% to $943.00.
