Gold prices end in red ahead of US inflation data

Gold prices closed in the red today, June 12, after the US dollar and Treasury yields strengthened as investors awaited US inflation data.

“Inflation is a little bit stickier, and I do think, in the distribution of outcomes, there’s a reasonable chance that rates go higher,” Goldman Sachs Group Inc. CEO David Solomon told CNBC.

Americans' May anticipation of inflation a year from now declined by 0.3% to 4.1% — the lowest annual outlook since May 2021, the New York Federal Reserve’s monthly Survey of Consumer Expectations showed.

Meanwhile, food, rent, medical and college expenses are foreseen to plummet over the next year. Expectations for growth in median home prices, in addition, soared to 2.6% in May from 2.5% in April — the highest reading since July 2022.

All eyes are on the release of the US Consumer Price Index tomorrow, June 13, with forecasts suggesting the annual inflation rate is likely to fall to 4.1% in May.

Further, the Labor Department is slated to issue the Producer Price Index (PPI) May reading, which is seen to slow year-on-year (YoY) to 1.5%.

It is 75% likely that the US central bank will hold interest rates at the 5-5.25% range during the June 13-14 meeting, as per the CME FedWatch Tool.

In terms of trading, bullion for August delivery shed 0.40%, or $7.50, to end at $1,969.70 an ounce, after landing at the $1,981.40 level in early trading.

On the other hand, the US dollar index, which gauges the greenback's strength against a basket of six currencies, climbed by 0.15% to 103.73 points at 08:43 pm Makkah time.