WASHINGTON (dpa-AFX) - Gold prices continued to decline post the U.S. CPI shocker on Tuesday that dashed the hopes of a softening in the Fed's monetary policy. Prices of the yellow metal which were around $1,740 before the release of the CPI numbers, plunged to $1,662 in the day's trade.
The Dollar's strength, in the backdrop of changed expectations on Fed Policy as well as the hardening of bond yields have been dragging Gold's prices since Tuesday. The retail sales numbers released on Thursday only reinforced the belief that the Fed would do all it can to control inflation, deepening the bearish sentiment on the precious metal.
On Friday, the Dollar strengthened against major currencies causing the Dollar Index to rally to 110.26. It is currently at 110.12, higher by 0.35 percent on an overnight basis.
The hardening of the U.S. ten-year bond yields by 0.73 percent in the day's trade, increasing the opportunity cost of holding non-yielding bullion, added to the price pressure on the yellow metal.
Gold Futures for December settlement weakened 10 points overnight to trade at $1,667.45, down 0.59 percent on an overnight basis. Prices oscillated between $1,662.05 and $1,676.60.
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