Central Banks Go Big on Gold Buying

CENTRAL bankers’ appetite for gold is growing, providing a bright spot for the traditional haven as investor interest ebbs. Global reserves expanded 333.2 tons in the first half, 39% higher than the five-year average for the period, according to a quarterly summary from the World Gold Council, which noted strong purchases by Thailand, Hungary and Brazil. If central banks continue to buy at the levels seen recently, it will provide a supportive element for the market, according to Louise Street, senior markets analyst at the council.

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Gold prices holding support above $1,800 an ounce following sharp 0.9% rise in U.S. Inflation

The gold market is holding gains and support above $1,800 an ounce as U.S. inflation pressures see a significant rise in June. Tuesday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.9% in June, after a 0.6% rise in May. The data significantly beat consensus forecasts as economists were forecasting a 0.5% rise. “This was the largest 1-month change since June 2008 when the index rose 1.0 percent,” the report said For the year, the report said that headline inflation rose 5.4%. Meanwhile, core CPI, which strips out food and energy costs, increased 0.9% in June, up from a 0.7% increase in May. Economists were expecting to see an increase of 0.4%.

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