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Gold Prices Pull Back, on Verge of Third Straight Slide

Gold prices retreated on Thursday, heading for a third straight slide as the precious metal extended a fall from the highest levels since around February on the back of jitters centered on rising U.S. inflation which pushed up bond yields and the dollar.

June gold was trading off $6.60, or 0.4%, at $1,816.20 an ounce on Comex, after falling 0.7% on Wednesday. A decline on Thursday would mark the longest skid for the most-active gold contract since a four-session slump ended April 30, FactSet data show.

A resurgence in yields for U.S. government bonds to their highest levels in weeks and a perkier U.S. dollar on the back of fears of pricing pressures building in the aftermath of the COVID pandemic have been part of the recent drag on the precious metal, financial analysts say.

“The rise in yields saw gold prices get thumped, while the US dollar also posted its best day this month,” wrote Michael Hewson, chief market analyst at CMC Markets UK in a daily note.

On Wednesday, a reading of U.S. consumer price inflation revealed the biggest monthly increase in 13 years, leading to a rise in U.S. Treasury yields and the dollar. The U.S. consumer-price index soared 0.8% to match the biggest monthly increase since 2009. The rate of inflation over the past year jumped to 4.2% from 2.6% in the prior month—the highest level since 2008.

Markets are awaiting another round of economic reports on Thursday including a weekly measure of unemployment benefit claims and a report on inflation for wholesale producers, which could affirm worries about surging prices.

The U.S. producer-price index, or PPI, is expected to be released at 8:30 a.m. ET along with jobless claims.

Source: Marketwatch

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