By Zhang Mengying
Investing.com – Gold was down on Thursday morning in Asia, with expectations growing that the U.S. Federal Reserve could hike interest rates more aggressively this month to fight red-hot inflation.
Gold futures fell 0.41% to $1,728.35 by 12:16 AM ET (4:16 AM GMT). The dollar, which normally moves inversely to gold, jumped on Thursday morning.
Benchmark U.S. 10-year Treasury yields rose, denting demand for zero-yield gold.
Data released overnight showed the U.S. consumer prices index jumped 9.1% in June, the highest in four decades.
“The CPI release generated volatility but not direction,” said Ilya Spivak, a currency strategist at DailyFX.
Expectations grew that the Fed could deliver a historic one percentage-point interest-rate hike later this month. Fed Bank of Atlanta President Raphael Bostic said “everything is in play” to combat price pressures.
“It would be silly to say that 75 basis points is dovish, but there is a risk here that the Fed does something that’s objectively big, like 75, but gold rallies because it’s not 100,” Spivak said, adding gold now has to support around $1,715-$1,717.
In other precious metals, silver fell 0.67%. Platinum eased 0.26%, while palladium was down 0.25%