“COMEX gold trades mixed near $1850/oz after a gain yesterday. Gold has recovered from 3-month low as US dollar index and bond yields shed some of their recent gains. Gold also benefited from increased demand as inflation hedge as inflation data from major economies highlighted higher price pressure. ETF outflows and Fed’s monetary tightening outlook has however kept a check on gold price. Gold has stabilized near $1850/oz level however a sharp rise may not materialize unless US dollar index corrects sharply,"said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
A weaker dollar makes the greenback-priced gold attractive for overseas buyers, while lower Treasury yields reduce the opportunity cost of holding zero-yield bullion.
Spot gold was up 0.2% at $1,855.11 per ounce after rising as much as 1% in the previous session. Among other precious metals, spot silver was up 0.1% to $21.57 per ounce, while platinum dipped 0.2% to $990.64.
Data released on Wednesday showed US consumer price index (CPI) rose 0.3% last month, the smallest gain since August. However, on a annual basis, the consumer price index climbed 8.3% on an annual basis in April, easing from 8.5% in March but outstripping the 8.1% estimate of economists.
US President Joe Biden called April's overall slow-down in inflation "heartening" but acknowledged inflation was still a major challenge.
The Fed raised its benchmark overnight interest rate by half a percentage point last week, the biggest hike in 22 years.
