Gold prices drifted lower on Wednesday as the dollar rebounded from recent losses and bond yields rose amid rising prospects of sharper interest rate hikes by the Federal Reserve.
The Fed Chair Jerome Powell had on Tuesday hinted that the Fed would keep tightening till inflation has been tamed.
U.K.’s inflation rising to a 40-year high and the likely aggressive response by the Bank of England also weighed on market sentiment.
Bond Yields increased across tenors and geographies in response to the developments around inflation and its management, and impacted prices of the non-interest-bearing yellow metal.
The dollar index climbed to 103.70, gaining about 0.35%.
Gold futures for June ended lower by $3.00 or about 0.2% at $1,815.90 an ounce.
Silver futures for July ended down by $0.206 at $21.544 an ounce, while Copper futures for July settled at $4.1785 per pound, down $0.0605 from the previous close.
On the U.S. economic front, a report released by the Commerce Department showed a modest decrease in new residential construction in the month of April.
The Commerce Department said housing starts edged down by 0.2% to an annual rate of 1.724 million from a revised rate of 1.728 million in March.
The slight drop in housing starts came as single-family housing starts plunged by 7.3% to an annual rate of 1.100 million.
Meanwhile, the report showed building permits, an indicator of future housing demand, tumbled by 3.2% to an annual rate of 1.819 million from a revised rate of 1.879 million in March.
The material has been provided by InstaForex Company – www.instaforex.com
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