Gold rises in dollar, Treasury yields weaken in inflation data

Gold rose on Thursday as the dollar and treasury yields eased after easing some concerns about a more aggressive Fed rate hike, according to U.S. Consumer Price Index.

A weaker dollar makes gold attractive to foreign buyers, where lower treasury yields reduce the cost of holding zero-yield bullion opportunities.

Fundamentals

* Spot Gold rose 0.2% to 8 1,855.11 an ounce, up 0.1% from the previous session, as of 0103 GMT. US gold futures rose 0.2% to 8 1,856.90.

* The dollar has depreciated, greenback-priced gold has risen in demand, inflation has remained high after the release of economic data, but the US Federal Reserve is unlikely to take a more aggressive approach to monetary policy.

* The Consumer Price Index (CPI) rose 0.3% last month, the smallest gain since August, the Labor Department said on Wednesday, with the CPI rising 1.2% month-on-month in March, the biggest gain since September 2005.

* Benchmark U.S. 10-year Treasury yields fell while data failed to allay concerns that the Federal Reserve’s agenda to cool rising prices could trigger a recession.

* The Fed raised interest rates by half a percentage point overnight last week, the biggest increase in 22 years as it moves to calm so-called epidemic-era monetary policy and efforts to tackle rising inflation.

* Spot Silver rose 0.1% to 21.57 an ounce, Platinum fell 0.2% to 90 990.64, and Palladium fell 0.7% to $ 2,021.16.

Data / Events (GMT)

0600 UK GDP estimated 3M / 3M March

0600 UK GDP estimates MM, YY March

0600 UK Manufacturing Output MM March

0600 UK GDP Prelim QQ, YY Q1

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