Gold Declines Ahead of U.S. Inflation Data

By Gina Lee

Gold prices fell on Wednesday morning in Asia, reaching their lowest level since February 11, as investors focused on inflation data and economic indicators.

The price of gold decreased by 0.22%, trading at $1,836.96 by 11:06 PM ET (3:06 AM GMT).

The U.S. dollar, which typically has an inverse relationship with gold, experienced a slight decline on Wednesday morning, although the movements were minimal. Recently, the dollar has gained momentum, bolstered by the U.S. Federal Reserve’s tightened policy aimed at combating inflation.

Last week, the Federal Reserve increased interest rates to 1%. Fed officials reiterated their commitment to aggressive strategies to address the highest inflation levels seen in 40 years on Tuesday.

U.S. President Joe Biden acknowledged the impact of rising prices on American families. In a speech given the day before key inflation data was released, he emphasized, “I want every American to know that I am taking inflation very seriously, and it is my top domestic priority.”

Investors are anticipating further rate hikes from the Federal Reserve and are awaiting additional economic data expected later in the day, which may provide insights into future monetary policies. Forecasts suggest that inflation rates will moderate but remain above 8%.

In the Asia Pacific region, a report issued on Wednesday indicated a 5.6% decrease in household spending in May compared to April, according to the Westpac-Melbourne Institute index. This decline is attributed to surging inflation and increasing interest rates.

Among other precious metals, silver saw a slight decrease of 0.1%, while platinum experienced a modest increase of 0.1%. Palladium, however, faced a drop of 1.2%.