Gold Suffered Losses on Tuesday Morning

The price of gold declined on Tuesday morning in Asia, although persistent inflationary pressuring gave the yellow metal a boost. Investors are waiting for U.S. inflation data later this week. 

Gold futures dropped 0.04% to $1,821.15 by 12:07 PM ET, remaining near the high of $1,823.21 hit on Monday. The U.S. currency, which typically moves inversely to gold, rose on Tuesday. It is worth mentioning that benchmark 10-year U.S. Treasuries steadied near their highest levels in a long time, hit during the previous session. 

Investors are closely monitoring several events. For example, the U.S. data, including the Consumer price index, is due in two days. Furthermore, they want to know how the data will impact the U.S. Federal Reserve’s timeline to tighten its monetary policy. At the moment, markets are pricing in a one-in-three chance that the central bank will increase interest rates in March 2022. 

Gold and risk factors

In Europe, there is no need for big monetary policy tightening in the eurozone. The European Central Bank’s (ECB) President Christine Lagarde expects inflation to fall back and stabilize at about 2%. The ECB’s President added that high energy prices, a key driver of inflation, are likely to eat into household purchasing power.

In the meantime, Cleveland Fed President Loretta Mester speaks on Wednesday. One day later, the Bank of England’s Governor Andrew Bailey will discuss important topics. 

Tensions in Eastern Europe are not over yet. French President Emmanuel Macron stated that the coming days would be very important after meeting with Russian counterpart Vladimir Putin. They met in Moscow on Monday.

As stated above, gold rose on Tuesday morning. Other precious metal also strengthened their positions. Silver gained 0.1%, platinum was steady at $1,020.06 and palladium added 0.2%.