Gold futures on Tuesday pulled back after touching highs above the key $1,900 an ounce level, putting prices on track for their first loss in three sessions.
Some firmness in the U.S. dollar was creating friction for bullion Tuesday, with investors hoping to propel the asset solidly above a $1,900-an-ounce threshold, seen as a level of resistance for prices.
With bond traders unsure what to expect in Thursday’s U.S. consumer price index data, “it’s no surprise to find $1,900 proving a tough psychological level for gold to break above,” Adrian Ash, director of research at BullionVault, told MarketWatch.
Thursday’s U.S. inflation report may provide the clearest impetus for commodity traders in the form of May consumer-price index. A hotter-than-expected read on the April CPI, which rose 4.2% year over year, temporarily rattled markets last month.
Another elevated U.S. CPI report could increase bets of a more rapid unwind of the Federal Reserve’s easy-money measures, which were implemented at the height of the COVID-inspired market turmoil in March of 2020 and have been supportive for gold.
In Tuesday dealings, August gold
fell by $4.40, or 0.2%, at $1,894.40 an ounce, after trading as high as $1,906.90. Prices for the most-active contract haven’t settled above $1,900 since Wednesday, which was the highest finish since early January.
On Thursday, in addition to the CPI data, investors may watch for policy guidance from the European Central Bank, which is slated to update its monetary policy plans, a week before the Fed’s two-day meeting that kicks off June 15.
“Gold’s recovery from March’s double-low was dramatic, too fast perhaps,” said Ash. “The 10% surge pulled lots of hot money into Comex futures and options, but it left physical demand and [exchange-traded fund] inflows quiet.”
The gold-backed SPDR Gold Shares ETF
on Tuesday traded 0.4% lower.
Rounding out action on Comex, prices for July copper
edged down by 0.8% to $4.49 a pound. July platinum
lost 1.3% to $1,158.90 an ounce and September palladium
traded at $2,808.50 an ounce, down 1%.