Gold inches higher; set for worst quarter in five as dollar shines

Gold firmed on Thursday as U.S. Treasury yields dipped, but faces its worst quarter since early 2021, as the dollar cemented its place as the safe-haven asset of choice, amid top central banks adopting aggressive tactics against runaway inflation.

FUNDAMENTALS

* Spot gold was up 0.1% at $1,818.31 per ounce by 0115 GMT. U.S. gold futures also firmed 0.1% to $1,819.70.


* Benchmark U.S. 10-year Treasury yields inched down, increasing the appeal of non-yielding gold.

* The dollar ticked up towards recent two-decade peaks, and could record its best quarter in over five years, making gold less attractive for buyers holding other currencies.

* Gold prices, set to drop for a third straight month, have fallen about 6% this quarter, their worst since the first quarter of 2021.

* Bringing down high inflation around the world will be painful and could even crash growth but must be done quickly to prevent rapid price growth from becoming entrenched, the world's top central bank chiefs said on Wednesday.

* Rate hikes by central banks to fight inflation raise the opportunity cost of holding bullion, which yields no interest.

* World Bank's chief economist Carmen Reinhart said she is skeptical that the U.S. and global economies can dodge a recession, given red-hot inflation, sharp rate hikes and slowing growth in China.

* Spot silver was flat at $20.71 per ounce, platinum

rose 0.3% to $919.68, and palladium gained 0.8% to $1,977.09. However, they were all still headed for monthly and quarterly losses.

DATA/EVENTS (GMT)

0130 China NBS Manufacturing PMI June

0600 UK GDP QQ, YY Q1

0600 UK Nationwide House Price MM, YY June

0645 France CPI (EU Norm) Prelim YY June

0755 Germany Unemployment Rate, Chg SA June

0900 EU Unemployment Rate May

1230 US Consumption, Adjusted MM May

1230 US Initial Jobless Clm Weekly