Spot gold was up 0.8 percent to $1,852.65 per ounce at the close of trading on Wednesday (1814 GMT), while gold futures in the United States rose 0.7 percent.
In April, consumer price inflation declined in the United States as gasoline prices plummeted from record highs.
Despite gold’s reputation as a safe haven against inflation, inflation data was higher than expected but not ‘horrifying,’ according to Tai Wong, an independent metals trader in New York.
Rising interest rates in the United States raise the opportunity cost of holding bullion while strengthening the dollar, which is priced in dollars.
Rising interest rates in the United States raise the opportunity cost of holding bullion while strengthening the dollar, which is priced in dollars.
According to Standard Chartered analyst Suki Cooper, “the expectation is that (gold) prices will revert to taking cues from real yields as the year progresses, encountering downside pressure in the second half but remaining elevated relative to historical levels.”
Silver rose 1.6 percent to $21.58 per ounce, while platinum rose 3.7 percent to $999.33 and palladium fell 1% to $2,044.17.
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