Gold Rebounds From Three-month Low

Markets

Gold bounced back on Wednesday, after having fallen to its lowest since February 11 earlier in the session.

Spot gold climbed 0.8 percent to $1,852.66 per ounce, while U.S. gold futures were up 0.6 percent at $1,851.57.

Investors await the release of U.S. consumer inflation data, which might impact the Federal Reserve’s monetary policy stance and demand for bullion.

The annual rate of consumer price growth is expected to slow to 8.1 percent in April from 8.5 percent in March. Data on producer prices, or wholesale prices that impact businesses, is also due.

Cleveland Fed President Loretta Mester told Bloomberg Television that she favors half-point interest-rate rises but doesn’t rule out 75-basis point move forever.

Her New York peer John Williams said that lowering inflation to more normal levels this year is the central bank’s main mission.

Fed Governor Christopher Waller said the U.S. economy is strong enough to front-load interest rate hikes.

China’s consumer inflation edged up in April amid lockdowns, while factory inflation eased to the slowest in a year, data showed earlier in the day.

Elsewhere, German consumer price inflation rose to 7.4 percent in April from 7.3 percent in March, final data from Destatis showed.

The inflation rate hit an all-time high since German reunification and also came in line with the flash estimate published on April 28.

Government bond yields across the euro area fell to their lowest levels in almost a week as comments from ECB President Christine Lagarde cemented expectations for the first rate hike in over a decade.

The central bank is likely to end its bond-buying stimulus program early in the third quarter of this year, followed by a rate hike that could come just “a few weeks” later, Lagarde said at a conference in the Slovenian capital.

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