Gold extended gains into the European session Tuesday, after data showed China’s inflation rate accelerated more than estimated in June, boosting the metal’s appeal as a hedge against rising prices in the world`s second-biggest buyer of the metal.
As of 2:21 ET, gold for immediate delivery gained 1.60 percent or 19.77 points to trade at $ 1,256.11 an ounce after opening at $1,236.60, having earlier hit a high of $1,260.20 and a low of $1,233.52.
Data released earlier on Tuesday showed that China`s annual consumer inflation accelerated more than expected in June as food costs soared. The National Bureau of Statistics said China’s annual CPI rose to 2.7 percent, compared to a previous reading of 2.1 percent a year earlier, while analysts expected 2.5 percent.
The People’s Bank of China is highly estimated to add further easing measures during the upcoming period to encourage domestic demand and curb the nation’s accelerated inflation, as well as controlling climbing food prices.
Other precious metals:
- Silver rose 1.70% to trade around $ 19.43
- Platinum edged higher by 0.98% to $ 1,375.40
- Palladium inched 1.22% up to $ 704.30
Gold climbed in the previous session on a weaker dollar, as the yellow precious metal and the green Benjamin have a tough inverse relation. A weaker U.S. dollar triggered bargain hunting after the yellow metal`s two-day slide caused concerns the Federal Reserve could soon end its monetary stimulus.
Investors will focus on the Federal Open Market Committee (FOMC) minutes, due for release on Wednesday. Fed President Ben S. Bernanke is expected to speak at the National Bureau of Economic Research Conference in Cambridge, Massachusetts, shortly after the minutes are released.
The USDIX is currently trading around 84.37 after opening at 84.50, having so far hit a high of 84.57 and a low of 84.36.