Gold gains as dollar, Treasury yields weaken after US inflation data

A weaker dollar makes gold attractive for overseas buyers, while lower Treasury yields reduce the opportunity cost of holding zero-yield bullion.

FUNDAMENTALS


* Spot gold was up 0.2% at $1,855.11 per ounce, as of 0103 GMT, having risen as much as 1.1% in the previous session. U.S. gold futures rose 0.2% to $1,856.90.

* The dollar fell, lifting demand for greenback-priced gold, after economic data showed inflation remained high but was unlikely to lead the U.S. central bank to shift to a more aggressive path of monetary policy. [USD/]

* The consumer price index (CPI) rose 0.3% last month, the smallest gain since August, the Labor Department said on Wednesday, versus the 1.2% month-to-month surge in the CPI in March, the largest advance since September 2005.

* Benchmark U.S. 10-year Treasury yields were down after the data failed to ease concerns that the Federal Reserve’s agenda to cool rising prices may induce a recession. [US/]

* The Fed raised its benchmark overnight interest rate by half a percentage point last week, the biggest hike in 22 years, as it moves to unwind ultra-easy pandemic-era monetary policy and attempts to combat soaring inflation.

* Spot silver was up 0.1% to $21.57 per ounce, while platinum dipped 0.2% to $990.64, and palladium fell 0.7% to $2,021.16.

DATA/EVENTS (GMT)


0600 UK GDP Est 3M/3M March

0600 UK GDP Estimate MM, YY March

0600 UK Manufacturing Output MM March

0600 UK GDP Prelim QQ, YY Q1