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Title: Gold Down, but Remains near One-Week High Thanks to Inflation


Feb 08, 2022 12:11AM ET


By: AnalysisWatch


Gold prices were down in Asia on Tuesday morning, although continued inflationary pressures gave the yellow safe-haven price a boost. Investors are also waiting for US inflation data later this week.


Gold futures eased 0.04% to $1,821.15 an ounce by 12:07 PM ET, staying near the high of 1,823.21 reached on Monday. The dollar, which usually moves inversely to gold prices, gained on Tuesday. The 10-year government bond in the United States has remained near its highest level since December 2019, reaching its highest level since December 2019.


US data, including the consumer price index, is due on Thursday. It also remains to be seen how the data will affect the US Federal Reserve's timetable for tightening monetary policy. Markets are currently assuming a one-in-three chance that the Fed will raise interest rates in March 2022.


On the other hand, there is no need for major monetary tightening in the Eurozone as inflation could fall and stabilize at around 2%, European Central Bank President Christine Lagarde said on Monday. She added that high energy prices, a major driver of inflation, are likely to eat into household purchasing power.


Cleveland Fed President Loretta Mester will speak on Wednesday, followed a day later by Bank of England Governor Andrew Bailey.


Ongoing geopolitical tensions in Eastern Europe over Ukraine also continue, but French President Emmanuel Macron warned after a meeting with his Russian counterpart Vladimir Putin that the coming days will be crucial. Putin, however, suggested that some progress had been made in the talks.


In other precious metals, silver gained 0.1%, platinum was unchanged at $1,020.06, and palladium rose 0.2%.

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