Stock Market

Gold loses ground as dollar remains firm

Gold futures fell Thursday, trading near a two-month low, as a firm U.S. dollar continued to pressure the metal.

Gold for June delivery


fell $7.10, or 0.4%, to $1,846.60 an ounce, after bouncing off its lowest close since mid-February in the previous session. July silver

fell 58.5 cents, or 2.7%, to $20.995 an ounce.

The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was up 0.4%, trading near a 20-year high. A strong dollar is seen as a negative for commodities priced in the unit, making them more expensive to users of other currencies.

The April consumer price index reading on Wednesday suggested inflation may have peaked, but still came in at a hotter than expected annual rate of 8.3%.

Another high reading on inflation ahead of the Fed’s next meeting in June could lead the central bank to consider a larger 75 basis point rate increase rather than the 50 basis point move that Fed Chairman Jerome Powell has said was on the table for the next two meetings, said Ricardo Evangelista, senior analyst at ActivTrades, in a note.

“Against such a backdrop, any gold strength resulting from the precious metal’s role as safe haven and inflation hedge is likely to remain capped by the rampant U.S. dollar,” he said.

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