Gold fell on Tuesday as the dollar rose on lower Chinese trade data, but caution ahead of this week’s US inflation readings kept desire for zero-yield bullion muted.
Spot gold XAU was 0.1% down at $1,934.02 per ounce, while US gold futures GCcv1 were 0.1% lower at $1,968.90.
The dollar rose 0.4%, although the dollar’s losses were restrained by a drop in benchmark 10-year Treasury rates from Friday’s highs in November 2022.
“More rate hikes are likely to be needed to bring inflation down to the Fed’s 2% objective,” Fed Governor Michelle Bowman said.
“Rates may begin to fall next year,” New York Fed Governor John C. Williams predicted.
A higher-than-expected CPI figure on Thursday could increase the likelihood of another rate hike in September.
Rate increases tend to raise bond rates, increasing the opportunity cost of owning zero-yield bullion.
