Prices slip from a more than five-month peak hit in the previous session
Bengaluru — Gold prices eased on Monday, slipping from a more than five-month peak hit in the previous session, as cautious investors assessed if rising inflation would prompt a more aggressive response by central banks.
“Until it breaks above $1,875-$1,880, gold should be capped by a stronger dollar, higher short-term US Treasury yields and a possible move higher in longer-term yields if the Fed starts to hint they are going to raise rates sooner,” said Stephen Innes, managing partner at SPI Asset Management. Minneapolis Federal Reserve Bank president Neel Kashkari said on Sunday he expects higher inflation over the next few months but warned that the US central bank should not overreact to elevated inflation as it is likely to be temporary.
“Inflation numbers have provided a boost to gold. However, prices could trend lower towards $1,700 over the course of 2022 as rising inflation is likely to mean that central banks speed up the pace of monetary tightening,” said Warren Patterson, head of commodities strategy at ING.
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