Gold prices drifted lower on Thursday as the dollar climbed higher amid prospects of a series of sharp interest rate hikes by the Federal Reserve to combat soaring inflation.
The dollar, which has been climbing higher consistently since mid-April on expectations of further tightening by from the Fed, shot up to a new two-decade high today, with the dollar index soaring to 104.93, gaining more than 1% from the previous close.
Gold futures for June ended lower by $29.10 or about 1.6% at $1,824.60 an ounce.
Silver futures for July ended down by $0.802 at $20.773 an ounce, while Copper futures for July settled at $4.1005 per pound, down $0.1085 from the previous close.
U.S. consumer price inflation data released overnight did little to ease investor worries over the outlook for inflation and interest rates.
The Labor Department’s report this morning that showed the annual rate of producer price growth slowed by less than expected in the month of April has added to the woes.
The report showed the annual rate of growth in producer prices slowed to 11% in April from a record high 11.5% in March, although economists had expected a bigger slowdown to 10.7%.
Core producer prices, which exclude prices for food, energy and trade services, were up by 6.9% compared to a year ago, reflecting a modest slowdown from the 7.1% spike seen in the previous month.
A separate report released by the Labor Department unexpectedly showed a slight increase in first-time claims for U.S. unemployment benefits in the week ended May 7th.
The Labor Department said initial jobless claims crept up to 203,000, an increase of 1,000 from the previous week’s revised level of 202,000. Economists had expected jobless claims to dip to 195,000 from the 200,000 originally reported for the previous week.
The material has been provided by InstaForex Company – www.instaforex.com
- South Korea Business Confidence Index Slips In May – BoK - May 24, 2022
- *South Korea Business Confidence Index 86.0 In May Vs. 87.0 In April- BoK - May 24, 2022
- Treasuries Show Significant Move Back To The Upside - May 24, 2022