Gold inches up as dollar retreats

Gold inches up as dollar retreats

Gold inches up as dollar retreats

The US data releases were weaker than expected with headline consumer prices unchanged for June with the year-on-year rate at 1.6% from 1.9% the previous month.

Hedge funds and money managers cut their net long position in COMEX gold to the smallest since January 2016 in the week to July 11, as they switched to their first bearish stance in silver in almost two years, US Commodity Futures Trading Commission data showed on Friday.

The greenback sank to new 10-month lows against major currencies after the US Consumer Price Index for June and retail sales for the same month fell far short of market forecasts, raising doubts about the Fed's current stance on monetary policy.

Spot gold gained 0.96 per cent at US$1,228.61 per ounce by 3:01pm EDT (1901 GMT) after hitting US$1,232.76.

The dollar dipped sharply lower following the data with the dollar index at 9-month lows near 95.0 while USD/JPY retreated to below 112.50. But the Fed and Ms Yellen have been waiting for this to happen for years, and it hasn't.

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"We also expect iron ore and coal prices to edge lower, which should put some downward pressure on the AUD". The most-active USA gold futures for August delivery futures settled up US$10.20, or 0.84 per cent, at US$1,227.50 per ounce. The contract finished the week up 1.5 per cent, its first gain in six weeks.

"The key level is US$1,230 on gold". A stronger US currency weighs on gold, making the dollar - p riced commodity more expensive for non - USA investors.

Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD, fell 0.43 per cent on Thursday from Wednesday. A quarterly inflation rate of 0.2 percent is expected for an annual rate of 1.9 percent.

In silver, there was a sharp split between funds, which had largely sold off their record long position, and ETF investors, who had been recently buying, Hansen said. Platinum rose 0.6 percent to $906.70 per ounce.

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