By Gina Lee
Investing.com – Gold was down on Thursday morning in Asia but clung onto most of its gains from Wednesday. The U.S.’ latest inflation data indicated a slowdown in consumer price increases and eased concerns of the U.S. Federal Reserve beginning asset tapering earlier than expected.
Gold futures inched down 0.03% to $1,752.85 by 12:14 AM ET (4:14 AM GMT) after recording its biggest one-day percentage gain since May 6 on Wednesday. The dollar, which usually moves inversely to gold, also inched down on Monday.
Data released by the U.S. on Thursday said the core consumer price index (CPI) rose a lower-than-expected 0.3% month-on-month in July, a pace that was slower than expected. The data indicated that inflation may have peaked as COVID-19-induced supply-chain disruptions work their way through the economy.
However, Fed officials offered divergent views on whether the data indicates that the economy is ready for asset tapering and interest rate hikes.
Kansas City Fed President Esther George said the labor market is expected to continue its gains and that the time for the central bank to start moving back towards pre-COVID-19 norms is now.
Atlanta Fed President Raphael Bostic said that as the Fed is committed to maximum employment before any moves are made, interest rates will not be raised too quickly and that inflationary pressures are likely to be temporary.
In Asia, the People’s Bank of China is also increasingly feeling the pressure to cut interest rates as the country's latest COVID-19 outbreak threatens the economic recovery.
In other precious metals, silver edged down 0.2% and platinum was steady at $1,017.91, while palladium inched up 0.1%.