Gold dips as investors weigh Fed inflation measures

Gold dips as investors weigh Fed inflation measures

Gold prices eased on Monday, as investors assessed the Federal Reserve's possible response to high inflation expectations, but a pullback in U.S. bond yields capped losses. Spot gold fell 0.3% to $1,858.86 per ounce by 0901 GMT, while U.S. gold futures dropped 0.4% to $1,861.40. Gold is once again facing some resistance around the $1,870 level and that's really the key, Saxo Bank analyst Ole Hansen said, adding, if gold fails to soon build on recent gains, "some profit taking could come into the market." Bullion climbed to a nearly five-month high last week as U.S. consumer prices posted their sharpest annual jump in 31 years, forcing investors to bring forward their rate hike expectations. However, Hansen said, "since the initial CPI shock, the market has actually steadily been reducing some of the (rate hike) expectations for 2022, and that's potentially also just in the short term at least, providing some support to gold." U.S. benchmark 10-year Treasury yields pulled back, reducing non-yielding bullion's opportunity cost. Minneapolis Federal Reserve Bank President Neel Kashkari said on Sunday he expected higher inflation over the next few months, but warned that the U.S. central bank should not overreact to elevated inflation as it