Gold Falls ahead of U.S. Inflation Data on Firm Yields, USD


May 12 Reuters Gold prices fell on Wednesday, weighed down by higher U.S. Treasury yields and a slight rebound in the dollar ahead of the muchawaited U.S. consumer price data due later in the day.

Spot gold was down 0.6 at 1,826.89 per ounce by 0313 GMT. U.S. gold futures eased 0.5 to 1,826.20.

The dollar has strengthened a little bit… if the inflation rate is higher than expected, it could encourage central banks to consider tightening their monetary policies faster than expected, said Margaret Yang, a strategist at DailyFX.

The dollar index was up 0.3, making gold less appealing for other currency holders.

Concerns of a potential acceleration in inflation dragged down the U.S. currency to a more than twomonth low in the previous session and drove Asian shares to onemonth lows earlier on Wednesday.

The U.S. consumer price data due at 1230 GMT is keenly awaited by market participants to gauge inflationary pressure.

Benchmark U.S. 10year Treasury yields scaled a more than oneweek peak, increasing the opportunity cost of holding gold.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields have weighed on nonyielding bullions appeal this year.

Fed officials grappled on Tuesday with Aprils unexpectedly weak employment growth, maintaining faith in the U.S. economic recovery but acknowledging the pace of the jobs recovery may prove choppier than anticipated.

Data on Tuesday showed U.S. job…


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