Read for 2 minutes (including analyst comments and price updates) * The dollar index recovers from Friday’s lows* Higher inflation is only a temporary phenomenon, according to a Fed official Reuters, June 28 – Despite subdued inflation figures, gold prices fell to a one-week low on Monday, driven down by a strengthening dollar and contradictory signals from the US Federal Reserve on monetary policy tightening. By 0249 GMT, spot gold had down 0.2 percent to $1,777.03 per ounce, following hitting a low of $1,770.36 earlier in the day. Gold futures in the United States fell 0.2 percent to $1,774.80. “The jury is still out (on the Fed’s tapering timeframe),” said Kyle Rodda of IG Markets. “On the one hand, we need to think about normalizing policy, but many Fed speakers are predicting that inflation will be temporary, so the Fed won’t need to slam on the brakes. And that’s sending a lot of mixed signals.” On Friday, gold prices climbed as much as 0.8 percent after data revealed that the Fed’s favored inflation gauge, the personal consumption expenditures price index, came in below expectations. President of the Minneapolis Fed, Neel Kashkari, predicted that recent high inflation readings will not endure. The dollar has recovered from Friday’s lows, making gold more expensive for non-dollar holders. In the medium term, the market is trading in a range, and unless gold breaks above $1,800 or below $1,760, it appears to be in a sideways trend, according to Rodda. Investors were also keeping a careful eye on the progress of a US infrastructure agreement. Palladium increased 0.1 percent to $2,640.31 per ounce, while silver remained unchanged at $26.07 per ounce. Platinum fell 0.7 percent to $1,103.40 per ounce. (In Bengaluru, Sumita Layek reported; Subhranshu Sahu edited) Continue reading
