Gold declines as inflation eases and the U.S. dollar gains momentum Gold declines as inflation ease
With the start of the last session this week, volatility and heavy fluctuation dominate the market; however, the shiny metal retreats sharply affected by the strengthening U.S. dollar, which forces downside pressures on the metals in general, and also affected by the eased inflation, which reflected negative demand for the shiny metal, which is have been held for years as a hedge against inflation since the metal is believed not to lose value over time.
Gold cut 0.47% or $8.13 per ounce to currently trade around $1721.25 per ounce after the opening of $1729.40 per ounce. The metal recorded the highest at $1734.88 and the lowest at $1715.42 per ounce.
The precious metal declined today despite the announcement made be CME Group yesterday, where the Group lowered the margin requirements needed to trade commodities, including gold, silver, platinum, iron-ore, steel, copper and light sweet crude oil contracts.
The margin requirements will be lowered for gold by 12%, for silver 14%, for copper 13% and finally for crude oil by 9%. The new rates will be effective after Monday closing.
The metal cut all the gains recorded this week after declining for three consecutive sessions, where the metal after setting the highest at $1752.30 per ounce declined to cut all the gains as t he strengthening U.S. dollar sent commodities, metals and other major currencies to the downside.
The U.S. dollar opened the session today at 78.57 and recorded so far the highest at 78.81 and the lowest at 78.56, and is currently trading around 78.65.
Germany released the consumer price final index for January, where the monthly index was unrevised at -0.4% compared with the previous of 0.7% expansion in December, while the annual index was revised higher to 2.1% in line with the previous index recorded in December. The annual CPI harmonised index remained unchanged at 2.3%. However, the metal lost momentum after news on eased inflationary threats and projections.
Among other precious metals, silver also declined 0.79% or $0.27 per ounce to currently trade around $33.63 per ounce after the opening of $33.90 per ounce. The metal set so far a high of $34.05 and a low of $33.51 per ounce.
Platinum also declined today, cutting 0.72% or $12.00 per ounce after the opening of $1657.50 per ounce, recording the highest at $1659.50 and the lowest at $1640.25 and is currently trading around $1645.50 per ounce.
Palladium shed 0.95% or $6.75 per ounce, trading currently around $704.50 per ounce, after recording the highest $711.75 and the lowest at $703.63, noting that the metal started the session today at $711.25 per ounce.