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Metals Stocks: Gold declines, with strength in the U.S. dollar helping to pull prices to a 2-week low

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Gold traded higher on Wednesday following a batch of inflation data out of Europe that analysts said could push the European Central Bank to act more aggressively.

Price action

Gold futures for August
GC00,
+0.70%

GCQ22,
+0.70%

delivery rose $7.40, or 0.4%, to $1,828.70 per ounce.

Silver futures
SIU22,
+0.73%

for September delivery rose 13 cents, or 0.6%, to $20.99 per ounce.

Platinum futures
PLV22,
+2.22%

for October delivery rose $21.50, or 2.4%, to $927.20 per ounce.

Palladium futures
PAU22,
+7.07%

for September delivery rose $85, or 4.6%, to $1,947 per ounce.

Copper futures for September
HGU22,
+0.85%

delivery rose 2 cents, or 0.6%, to $3.80 per pound.

What analysts are saying

While the headline reading on German inflation declined in June for the first time since January, inflation data out of Spain showed price pressures accelerating at their fastest pace in decades. According to preliminary data released by German statistics office Destatis on Wednesday, consumer prices rose 7.6% year-over-year, lower than the 8% forecast by economists in a Wall Street Journal poll. In Spain, the annualized inflation rate in June topped 10%, the highest since 1985.

See: Canaria in the coal mine? Spanish inflation surges a shocking 10.2% to a 37-year high

Meanwhile, in the U.S., a final reading on first-quarter gross domestic product showed the economy contracted at a slightly faster clip than previously believed. the final reading showed the U.S. economy shrunk by 1.6%, compared with the 1.5% contraction reflected in the first revision.

Edward Moya, the senior market analyst at Oanda, said the inflation data out of Europe might push the ECB to raise interest rates more quickly than previously expected, helping to weaken the dollar and support gold.

“Gold is still stuck in a wide trading range, but a collapse below the $1800 seems less likely as the dollar peak might be in place,” Moya said.

The ICE U.S. Dollar Index
DXY,
+0.03%
,
a measure of the dollar’s strength against a basket of rivals, was essentially flat at 104.50.

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