Gold Prices Have Plummeted From Record Highs Following Robust US Inflation Data.

 Summary:

Gold prices retreated on Wednesday due to a strengthening U.S. dollar and higher Treasury yields, following a robust inflation report. Spot gold slid to $2,338.19 per ounce at 8:58 a.m. ET. Rising geopolitical tensions and anticipation of central bank rate cuts have driven recent price surges.

Gold prices pulled back from their peak levels on Wednesday amid a strengthening U.S. dollar and an uptick in Treasury yields. This adjustment followed the release of a robust inflation report, which subdued expectations for an imminent interest rate cut in the United States.

At 8:58 a.m. ET, spot gold slid 0.6% to $2,338.19 per ounce, with U.S. gold futures edging down 0.1% to $2,360.7.

Following the data release, the U.S. dollar index saw a 0.5% surge, accompanied by an uptick in U.S. Treasury yields. This dynamic diminished the attractiveness of non-yielding bullion assets.

In recent weeks, both gold and silver prices have surged to unprecedented highs in both global and domestic markets. This upward trajectory can be attributed to expectations of interest rate cuts by central banks worldwide and escalating geopolitical tensions, factors that have substantially influenced bullion prices. Presently, both gold and silver are navigating through overbought territories, encountering robust resistance levels. International gold prices are facing significant resistance in the range of $2,450 to $2,485, while domestically, bullish momentum is expected to taper off around levels of 72,000 to 72,200. Similarly, silver prices are encountering resistance internationally at levels between $28.50 and $28.95, and domestically at approximately 83,500. Given these conditions, profit-taking in both precious metals is anticipated.

On Wednesday, the Shanghai Futures Exchange announced its decision to implement trading limits on gold contracts due to a substantial surge in prices, indicating regulatory responses to market dynamics.

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Source - https://www.livemint.com/market/commodities/gold-prices-drop-from-all-time-highs-over-strong-us-inflation-figures-11712767021695.html

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