Gold futures settled modestly higher on Tuesday as traders reacted to data showing an acceleration in U.S. consumer price inflation, and comments from a Federal Reserve official.
Traders also followed news about the spread of the delta variant of the coronavirus, and weighed in possible fresh lockdown measures in several countries.
The dollar’s strong uptick limited gold’s rise. The dollar index advanced to 92.77 this afternoon, gaining about 0.55%.
Gold futures for August ended up by $4.00 or about 0.2% at $1,809.90 an ounce.
Silver futures for September ended lower by $0.099 or 0.4% at $26.140 an ounce, while Copper futures for September settled at $4.3070 per pound, down $0.0090 or 0.2% from the previous close.
A report from the Labor Department today showed consumer prices in the U.S. saw the biggest monthly increase in thirteen years in the month of June. The report said the consumer price index jumped by 0.9% in June after climbing by 0.6% in May. Economists had expected consumer prices to rise by 0.5%.
Core consumer prices were up by 4.5% year-over-year in June, reflecting an acceleration from the 3.8% jump in May. Core prices saw the biggest annual increase since November of 1991.
New York Federal Reserve President John Williams said on Monday that the U.S. economy has not achieved the substantial further progress for the Fed to start tapering asset purchases.
The President of the St. Louis Fed James Bullard said in an interview to The Wall Street Journal today that the central bank should start reducing the stimulus, but added that it need start immediately.
Traders also noted San Francisco Fed President Mary Daly’s comments that the strong gain in the U.S. CPI is just a temporary “pop” inflation that won’t last, and the Fed should remain “steady in the boat” with its easy monetary policy stance.
Fed Chair Jerome Powell is scheduled to testify on the semi-annual monetary policy report before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.