Gold prices rebound ahead of US inflation data

On Wednesday, gold prices clawed back from a three-month low as the greenback and US treasuries declined, ahead of key American inflation data.

Bullion futures for June 22 bounced up 0.49% or 9.10 points to $1,850.20 per ounce. This movement came after a drop of 0.20% to $1,836.50 per ounce in the early trading session.

Spot gold jumped 0.69% or 12.49 points to $1,851.01 per ounce. It reversed a plunge of 0.10% at $1,838.26 per ounce, the lowest since February 11.

Accordingly, investors look forward to the release of the US consumer price index data for April. They anticipated the monthly core CPI to rise 0.40% from the previous rate of 0.30%. On an annual basis, the forecasted key metric was at 6.00%, lower than the preliminary data of 6.50%.

The markets have priced in the current move in real yields ahead of the economic data. The metric could impact the Federal Reserve’s monetary policy stance. Analysts widely expected the Fed to increase rates at all costs to snuff out the red-hot inflation.

Previously, higher real yields drove gold lower, supporting the USD despite nominal yields easing. However, the ten-year treasury bonds declined five basis points to 2.94% in the current session.

Correspondingly, the US dollar index slumped 0.42% or 0.43 points to 103.48. The benchmark declined from an upturn of 0.28% to 103.94 yesterday.

Nevertheless, the greenback hovered near recent 20-year highs, making USD-priced bullion less attractive for other currency holders.

Gold is a hedge against inflation and a safe store of value during times of political and economic crises. Regardless, the precious metal is susceptible to rising short-term rates, which raises the opportunity cost of holding zero-yield bullion.

Gold recovers as Palladium extend losses

Meanwhile, palladium extended its losses as China remained under its zero-COVID policy. The prolonged lockdowns in the world’s second-largest economy hammered the trade and industrial demand.

Futures tied to the metal fell 0.50% or 10.42 points to $2,033.28 per ounce. It trailed its Tuesday plunge of 3.00% to $2,021.03 per ounce.

Conversely, silver followed the recovery of gold in the previous selloff. The most active contract of the metal climbed 1.65% or 0.35 points to $21.79 per ounce. It edged up from a downturn of 1.81% to $21.42 yesterday.

At the same time, platinum futures soared 2.43% or 22.95 points to $970.20 per ounce. It followed its previous gain of 0.77% to $943.55 per ounce.