WASHINGTON (dpa-AFX) - Gold prices eased on Friday and the euro neared parity with the dollar, as traders bet on the prospect of a eurozone recession caused by soaring inflation.
Spot gold dipped 0.2 percent to $1,736.64 per ounce, while U.S. gold futures were down 0.3 percent at $1,735.
The EUR/USD has extended its slide to its lowest level in nearly two decades below 1.0100 as recession risks continued to weigh on investor sentiment.
Despite the worsening inflation outlook in the euro area, ECB policymakers sound relatively cautious regarding the rate outlook.
European Central Bank (ECB) Governing Council member Ignazio Visco said today that there were no signs at present of a 'dangerous spiral' between wages and price increases, and that policy normalization can be gradual after a 25-bps hike in July.
Elsewhere, the Japanese yen rose on safe-haven demand as former Japanese Prime Minister Shinzo Abe died after being shot twice at a campaign event in the Nara region ahead of upper house elections on Sunday.
Investors await the release of U.S. non-farm payroll data for June later in the day and the June inflation data to be released next week for clues to the possible rate hikes by the Federal Reserve.
Federal Reserve governors Christopher Waller and St. Louis Fed President James Bullard on Thursday backed another big interest-rate rise in July but said they think recession fears are overblown.
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