WASHINGTON (dpa-AFX) - Gold prices declined more than 1 percent in the day's trade as data showing stubborn inflation pushed up bond yields and softened the stock market euphoria over robust corporate earnings.
Earlier, inflation in the U.K. in September increased to 10.1 percent, from 9.9 percent in August. Core inflation excluding the more volatile food and energy prices increased to 6.5 percent, from 6.3 percent in August. The Final reading of inflation in The Euro Area in September stood at 9.9 percent, versus 9.1 percent in August.
The hardening of the U.S. ten-year bond yields by 2.55 percent in the day's trade, increasing the opportunity cost of holding non-yielding bullion, added to the price pressure on the yellow metal. Bond yields hardened not just in the U.S, but also across regions and tenors, pricing in the likely increase in interest rates that would be required to combat inflation.
The Dollar meanwhile strengthened against major currencies, causing the Dollar Index to rally to 112.98. It is currently at 112.73, higher by 0.53 percent on an overnight basis.
Gold Futures for December settlement weakened 17 points to trade at $1,638.85, down 1.02 percent on an overnight basis. Prices oscillated between $1,636.25 and $1,659.75.
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