Gold Holds Up Ahead of US Inflation Data

Gold traded around $1,880 an ounce on Wednesday, hovering near its strongest levels in eight months as investors awaited key US inflation data that could provide fresh clues on the Federal Reserve’s tightening path. Federal Reserve Chair Jerome Powell also avoided making comments on the outlook for monetary policy in a speech on Tuesday, but he said that “restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy.” Moreover, Fed Governor Michelle Bowman said the central bank has more work to do to curb inflation, noting that more rate increases are needed. Gold is highly sensitive to the rates outlook as higher interest rates raise the opportunity cost of holding non-yielding bullion.

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