Gold Down, as Central Banks Take Aggressive Stance Against Inflation By

© Reuters

By Zhang Mengying

– Gold was down on Thursday morning in Asia, set to fall for a third straight month, as investors assessed bullion’s outlook with major central banks adopting aggressive means to bring down soaring prices.

Gold futures inched down 0.04% to $1,816.75 by 12:56 AM ET (0456 GMT). The dollar, which normally moves inversely to gold, inched down on Thursday morning. The dollar hovered near recent two-decade peaks. The strengthening dollar has dented non-yielding bullion’s demand.

U.S. Federal Reserve Chair Jerome Powell warned that inflation could be long-lasting, and it was important to bring down inflation despite the economic pain during the European Central Bank (ECB)’ s annual forum in Portugal.

Meanwhile, Fed Bank of Cleveland President Loretta Mester said officials should act forcefully to curb price pressures.

Looking forward, the bias will become increasingly bearish as rate hikes continue to come through and bring down inflation expectations, DailyFX currency strategist Ilya Spivak told Reuters, adding that $1,780-$1,790 is a critical support level.

In Asia-Pacific, official data released earlier in the day showed that China’s manufacturing purchasing managers index (PMI) rose to 50.2 in June from 49.6 in May, the first expansion since February, indicating that the country’s factory activity is expanding.

In other precious metals, silver fell 0.38%. Platinum gained 0.78% while palladium climbed 2.19%.

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