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Gold Down From Five-Month Peak Following Positive U.S. Economic Data

imageCommodities2 minutes ago (Jun 02, 2021 12:48AM ET)

(C) Reuters.

By Gina Lee

Investing.com – Gold was down on Wednesday morning in Asia from the near five-month high hit during the previous session over the release of better-than-expected U.S. economic data and a rise in bond yields.

Gold futures were down 0.32% to $1,898.95 by 12:43 AM ET (4:43 AM GMT), falling back below the $1,900-mark. The dollar, which usually moves inversely to gold, inched up on Wednesday and the benchmark 10-year U.S. Treasury yield rose to a more than one-week high.

In the U.S., data released on Tuesday said the Institute of Supply Management Manufacturing Purchasing Managers Index rose to a better-than-expected 61.2 in May. However, investors are concerned about raw materials shortages and labor constraints.

Investors’ risk appetite increased as the strong U.S. economic data indicated an economic rebound and higher inflation.

U.S. Federal Reserve governor Lael Brainard also reiterated on Tuesday that the Fed is not ready to deviate from its current dovish monetary policy just yet. “Remaining steady in our outcomes-based approach during the transitory reopening surge will help ensure the economic momentum that will be needed as current tailwinds shift to headwinds is not curtailed by a premature tightening of financial conditions,” she said.

Across the Atlantic, the Eurozone Consumer Price Index jumped 2% year-on-year in May, surpassing the European Central Bank’s target for the first time in over two years. This led to concerns over whether the central bank will keep its ultra-loose monetary policy in its policy decision due to be handed down in the following week.

In Asia, Australia reported a better-than-expected GDP as data released earlier in the day said that Gross Domestic Product grew 1.8% quarter-on-quarter and 1.1% year-on-year in the first quarter of 2021.

On the data front, investors now await further U.S. economic data, including non-farm payrolls and unemployment rate in May, due on Friday.

In other precious metals, both palladium and silver inched down 0.1%, while platinum was steady at $1,191.51.

Gold Down From Five-Month Peak Following Positive U.S. Economic Data

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