Gold Drops After US PPI Data

PPI in the US exceeded expectations. The expectation that the Fed will increase its tightening policies caused a decline in gold prices.

Gold Drops After US PPI Data. PPI data in the USA came in above expectations. Gold prices depreciated by 1.7 percent yesterday following data that led to the expectation that the Fed will increase interest rates more aggressively to combat inflation. Gold, which investors see as a safe haven against inflation, followed a horizontal course today, on the last trading day of the week, after the increase in purchases. On the other hand, ten-year US bond yields fell by around 25 basis points. While such a development is expected to increase the demand for gold in general, this increase did not materialize as gold stocks in funds traded on the Exchange fell for the sixth consecutive session. The precious metal fell more than 3% this week to as low as $1,824. In his assessment of the markets, Guardian Gold Australia Business Development Manager John Feeney said, "The main factor that brought gold down was the fluctuation in the market, which caused investors to turn to the dollar." “Spot gold seems to be oversold,” Feeney said. “Therefore, we can see a serious support around $1800.” China's Covid-19 Policies Followed Investors closely followed China, which was re-quarantined with the detection of new cases. The slowdown in the economy after the closures in China, the world's largest gold buyer, had an impact on the gold valuation. The Beijing administration, on the other hand, disputed claims that the city would be closed, causing locals to swarm to the marketplaces. Touching on the effects of China's Covid-19 policy on gold, Feeney said, "Chinese zero Covid-19 policy is effective on gold because it causes the demand there to dry up."