Gold prices edged higher on Tuesday to hover near the highest level in three months as worries around inflation spooked investors around the global markets.
Spot gold edged up 0.1 percent to 1,838.22 per ounce, after having hit as high as $1,845.51 on Monday, the highest since Feb. 11. U.S. gold futures were marginally higher at $1,838.85.
The upside remained limited as U.S. bond yields inched higher, with the yield on the key 10-year Treasury note rising 1.3 basis points to 1.615 percent. The modest uptick in bond yields extended some support the U.S. dollar.
Soaring commodity prices have sent the cost of raw materials from copper to iron ore and lumber to record highs, posting downside risks to growth.
Investors look ahead to U.S. inflation data and speeches from Fed officials this week to see how authorities are likely to respond to receding risks posed by the coronavirus in some major economies.
The U.S. CPI report due Wednesday is forecast to show prices continued to increase in April.
As inflation worries mount, it is feared that the Federal Reserve might start reining in its ultra-loose monetary policy sooner than expected.
Chicago Federal Reserve President Charles Evans told CNBC on Monday that he would be comfortable if inflation ran a little hot for a while. Governor Lael Brainard will have a chance to reinforce that message later today.
The material has been provided by InstaForex Company – www.instaforex.com