 "gold")
By Ashitha Shivaprasad
(Reuters) - Gold extended its slide to a near one-year low on Wednesday after data showing a jump in U.S. inflation supported bets for aggressive rate hikes by the Federal Reserve, while the dollar scaled fresh peaks.
Spot gold was down 0.4% at $1,719.49 per ounce by 09:35 a.m. ET (1335 GMT), after dropping to its lowest since August at $1,707.09 earlier in the session. U.S. gold futures were down 0.6% at $1,714.60.
U.S. consumer prices accelerated in June, resulting in the largest annual increase in inflation in 40-1/2 years and cementing the case for the Fed to hike rates by 75 basis points later this month.
"As the data showed, inflation is running hotter than expected, that portends the Fed will be more aggressive in raising rates in future meetings. This is hurting gold and commodities across the board," said David Meger, director of metals trading at High Ridge Futures.
Also Read
Gold is traditionally considered an inflation hedge, but rising rates draw investors away from bullion, as they tend to lift bond yields and thus raise the opportunity cost of holding the zero-yield precious metal.
There was an immediate flight to the dollar after the strong inflation data, which caused a downward reaction in gold, said Fawad Razaqzada, market analyst at City Index. A stronger dollar makes gold expensive for overseas buyers.
"Gold seems to be in the danger of falling below the $1,700 level ... It is hard to be positive about gold as inflation continues to be in the forefront. Unless something fundamentally changes and inflation comes down, gold will continue to suffer."
Spot silver firmed 0.4% to $18.96 per ounce, platinum fell 0.4% to $842.25 and palladium shed 2.1% to $1,982.90.
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Vinay Dwivedi)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
