Gold Slips On Positive US Inflation Data

Spot gold XAUUSD was 0.1% lower at $1,251.17 an ounce as of 0352 GMT. U.S. gold futures for August delivery were down 0.2 percent at $1,252.50 an ounce. The dollar strengthened against a basket of currencies and hit a fresh six-week high of 111.06 against Japanese yen, supported by the relative strength of the U.S. economy and on prospects of further rate hikes from the Federal Reserve. U.S. consumer prices accelerated in the year to May, with a measure of underlying inflation hitting the Federal Reserve’s 2 percent target for the first time in six years, data showed on Friday.

Gold Slips Further

The rise in price pressures will probably not shift the Fed from its stated path of gradual interest rate increases as policymakers have indicated they would not be too concerned with inflation overshooting its target. is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.

Silver was trading downtrend similar to gold with a dovish opening on early Asian market hours. XAGUSD pair is currently trading at $15.94, however, the bear’s grip on pair remains intact. This downward movement was influenced due to off-loading of positions by participants in line with a weak trend in global markets.

The oil supply disruption in Libya could last a little longer than previously thought, threatening to tighten global supplies at a time when a supply deficit was already starting to become a serious problem. President Donald Trump’s request for more Saudi Arabian oil put a spotlight on growing U.S. unease about how quickly the crude sector has switched from glut to deficit, but a boost in Middle East production may not be enough to stem the price rallies that have hit consumers. Supply disruptions in major producers like Canada and Venezuela, coupled with strong crude demand from robust global growth, have tightened the oil market faster than many analysts expected. Prices have shot up in response. On Friday, U.S. crude ended just over $74 a barrel, its highest since November 2014. WTIUSD continues to hold level despite a slight drop in price in early Asian hours and is currently trading at $73.89 per barrel.