Gold Declines as Dollar Gains Strength, but Persistent Inflation Concerns Limit Losses

By Gina Lee

Gold prices saw a decline on Tuesday morning in Asia, with the dollar strengthening despite ongoing concerns about inflation that previously pushed gold to a peak not seen in over a week.

As of 11:50 PM ET (3:50 AM GMT), gold was down 0.42% to $1,760.10, a drop following its rise to $1,770.41 on Monday, marking its highest level since September 23. The dollar, which typically has an inverse relationship with gold prices, increased on Tuesday.

U.S. Trade Representative Katherine Tai announced that some Chinese imports would be exempt from tariffs established during former President Donald Trump’s administration. She emphasized the need for honest discussions with China regarding its commitments made in the previous trade agreement and its industrial policies.

In another significant development, President Joe Biden cautioned that the government might exceed its $28.4 trillion debt ceiling and risk a historic default unless Republicans agree to raise it within the next two weeks.

Additionally, U.S. data released on Monday indicated that retail sales rose by a better-than-expected 1.2% month-on-month in August.

In the Asia Pacific region, India reported a dramatic 658% surge in gold imports for September compared to the lower figures from 2020. This increase was attributed to a correction in local prices, which prompted jewelers to ramp up purchases in anticipation of the upcoming festive season.

The Reserve Bank of Australia also made its monetary policy decision public, maintaining rates at 0.10%. The Reserve Bank of New Zealand is set to announce its decision on Wednesday, followed by the Reserve Bank of India two days later.

In the realm of other precious metals, silver and platinum saw declines of 0.6% and 0.7%, respectively, while palladium eased by 0.2% to $1,900.58.