Gold holds biggest gain in three months
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Gold holds biggest gain in three months

Gold holds biggest gain in three months

The global economic recovery has piled pressure on bullion this year

Gold held its biggest gain in three months, after moderating US inflation eased concerns of earlier-than-expected stimulus tapering by the Federal Reserve.

US consumer prices climbed at a slower pace last month than in June, data showed on Wednesday. That triggered a move higher for bullion as worries about the Fed’s urgency to tighten monetary policy softened, though prices are still lower this week after a flash crash on Monday.

Bullion slid to the lowest since March at the start of the week after a report showed the US labour market recovering faster than expected. The jobs gains have led to a slew of Fed officials raising the prospect of tapering its massive bond-buying programme soon, including Kansas City Fed President Esther George. More US data on producer-price inflation and jobless claims are due Thursday.

The global economic recovery has piled pressure on bullion this year as investors prepare for the ultra-easy policies of the pandemic era to be reined in. Gold is also inversely tracking the dollar, with August losses for the precious metal mirrored in the greenback’s gains.

“A strong US dollar and firm global equities continue to hit the safe-haven demand and thus the price of gold,” said Hareesh V., research head for commodities at Geojit Financial Services. At the same time, concerns over the spread of the delta variant of the Covid-19 virus continue to offer lower-level support to prices, he said.

Spot gold added 0.2 per cent at $1,754.57 an ounce by 9.37am in London, after climbing 1.3 per cent on Wednesday. Silver and platinum fell, while palladium was little changed.

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