Gold prices falls as the U.S. dollar strengthens

On June 8, Gold prices declined as the U.S. dollar strengthened. Remarkably, investors cautiously awaited U.S. economic data due later this week to measure inflationary pressure and the Federal Reserve’s steer on monetary policy.

Spot gold fell by 0.2% at traded at $1,896.20 per ounce. Meanwhile, U.S. gold futures held steady at $1,898.70.

The U.S. dollar index increased 0.1% against its rivals, making the yellow metal more expensive for other currency holders.

According to Margaret Yang, a strategist at DailyFX, inflation has been rising in the last weeks. Yang added that traders are awaiting confirmation from U.S. data this week on continuous strengthening in the cost levels.

Yang announced that U.S. data is anticipated to have a mixed effect on the precious metal. On the positive side, many consider gold as an inflation hedge, so the higher the number the more appealing gold will be. But she added that more inflation would raise concerns about Fed tapering.

A weaker-than-anticipated U.S. jobs report last week has weakened expectations of an early tapering in the Fed’s stimulus.

ECB to hold its policy meeting on June 10

Additionally, it’s essential to mention that the European Central Bank is likely to hold its policy meeting on June 10.

According to Jeffrey Halley, OANDA senior market analyst, the yellow metal will struggle to maintain gains above $1,900 an ounce until the U.S. inflation data is out of the way.

Jeffrey Halley says he anticipates gold to rise around in a choppy $1,860 to $1,900 range this week. Halley announced that last week’s peak at $1,917 an ounce is unlikely to be retested this week.

Meanwhile, SPDR Gold Trust, which is the world’s biggest gold-backed exchange-traded fund, announced its holdings declined 0.6% to 1,037.33 tonnes on June 7. Meanwhile, on Friday’s session it stood at 1,043.16 tonnes.

Among other precious metals, silver dropped by 0.5% to $27.75 per ounce. Meanwhile, palladium remains mostly unchanged at $2,834.27. Platinum declined by 0.5% and setted at $1,167.21.