WASHINGTON (dpa-AFX) - Gold edged higher in cautious trade on Wednesday as the dollar held near a one-week high amid growing bets the Federal Reserve will raise interest rates, starting from March amid a stable labor market and rising inflation.
Spot gold edged up 0.2 percent to $1,817.38 per ounce, while U.S. gold futures were up 0.3 percent at $1,817.35.
U.S. Treasury yields hit new highs ahead of next week's Federal Reserve policy meeting.
U.S. 10-year and five-year Treasury yields held near two-year highs, while the German 10-year bond yield rose above 0 percent for the first time since May 2019.
Markets now position for four or five Fed rate hikes this year should inflation remain elevated.
Elsewhere, the European Central Bank is expected to tighten monetary policy once the spread of the omicron Covid-19 variant subsides.
Germany's consumer price inflation in 2021 hit its highest level in almost 30 years mainly due to the high monthly inflation rates in the second half of the year, Destatis said earlier today.
Consumer prices increased 3.1 percent in 2021 after rising 0.5 percent in 2020. A higher year-on-year rate of price increase than in 2021 was last measured in 1993, when prices were up 4.5 percent.
The pound edged lower against the euro and was broadly flat against the dollar despite U.K. consumer price inflation surging to 5.4 percent in December from 5.1 percent in November.
This was the highest annual inflation rate in the National Statistic data series, which began in January 1997.
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