Gold edges lower as dollar strength takes a toll
GOLD prices neared a 9-month low on Tuesday (Jul 12), as the US dollar strengthened to its highest level in 20 years, stifling demand for greenback-priced bullion.
Spot gold was down 0.1 per cent at US$1,732.17 per ounce at 12.50 am GMT. US gold futures dipped 0.1 per cent to US$1,730.80.
The dollar sat near a fresh 20-year high touched on Monday, making gold more expensive for buyers holding other currencies.
Gold prices dropped to their lowest level since Sep 30 of US$1,730.42 per ounce in the previous session.
World equities fell on Monday as investors prepare for fresh monthly inflation data that may be seen as potentially influencing the Federal Reserve's path ahead for interest-rate increases.
US consumer price index data, a key measure of inflation, is due on Wednesday and is expected to show prices rose by 8.8 per cent in June from a year earlier.
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Recent inflation data "has not been as encouraging as I would have liked", Atlanta Fed president Raphael Bostic said on Monday, saying that the lack of month-to-month improvement in the pace of price increases warrants another 0.75 percentage point increase in the federal funds rate when policymakers meet later this month.
Higher interest rates and bond yields increase the opportunity cost of holding non-yielding bullion.
Benchmark US 10-year Treasury yields steadied after a dip on Monday.
Euro zone finance ministers said on Monday the fight against inflation was the current priority despite dwindling growth in the bloc, as they were informed of a deteriorating economic outlook by the European Commission.
Spot silver fell 0.2 per cent to US$19.04 per ounce, platinum dipped 7 per cent to US$887.89, and palladium dropped 1.3 per cent to US$2,133.14. REUTERS
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