Gold dipped to hold at a three-week low, as speculation the Federal Reserve will keep aggressively tightening monetary policy and potentially trigger a recession had investors again seeking shelter in the US dollar.
Renewed strength in the greenback has now seen bullion tumble more than 20% since a March peak. The non-yielding metal, which typically has a negative correlation with the dollar and rates, has been pressured by the stronger US currency.
On Wednesday, Minneapolis Fed President Neel Kashkari said the US central bank couldn't pause its tightening campaign once its benchmark rate hits 4.5% to 4.75% if "underlying" inflation was still accelerating. That led to a rally in the US dollar and higher bond yields.
Inflation woes go beyond the US, as shown on Wednesday by CPI gauges from Canada and the UK, which both came in higher than predicted.
Gold dipped 0.2% to $1,626.95 an ounce at 8:01 a.m. in Singapore, after closing 1.4% lower in the previous session. The Bloomberg Dollar Spot Index rose 0.1%, following a 0.6% gain on Wednesday. Silver, platinum and palladium all declined.