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The Price of Gold Is Being Held Back by a Strong Dollar Following US Inflation Data

July 14, 2021

Talking Points:

  • Spot gold was flat at 1,809 USD per ounce, at the time of publishing.
  • U.S. gold futures were 0.2% lower at 1,813.60 USD per ounce.


Gold prices were held back today, slowed by a strong dollar following data showing that the U.S. consumer prices had risen last month and by the most for 13 years, with the attention now moving to the Federal Reserve Chair Jerome Powell’s statement before Congress.

The dollar index remains steady, having witnessed its best daily percentage gain in almost a month in the late trading session yesterday. A strong dollar makes the price of gold more expensive for other currency holders.

The U.S. consumer prices rose while supply constraints and the continued rebound in the costs of travel-related services following the pandemic as the economic recovery gathers pace, raising the belief that the inflationary concerns are likely to remain.

Following the data, the market attention has moved to the Fed, with Mr Powell set to speak in front of Congress later today for any clues on rising price pressures and monetary support.

Mr Powell has repeatedly said that higher inflation will be transitory, saying that he expected supply chains to normalise and adapt. Janet Yellen the Treasury Secretary also shares this viewpoint.

A senior official from the White House said on Tuesday. That we expect supply chain pressures that are influencing the higher inflation to ease in the “not-too-distant future,” however, they were not able to say exactly when this would happen. 



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