Gold prices tumbled on Thursday, threatening to derail a strong winning streak that saw prices of the yellow metal touching a high of $2,058 earlier in the day. The Dollar's surge in the run-up to the PCE data release weighed on sentiment.
Prices of the yellow metal continued to gain as comments by Fed speakers triggered renewed hopes of earlier-than-expected rate cuts by the Fed. An easing in inflation in several regions of Europe also bolstered sentiment, dragging bond yields lower and lifting gold prices.
The spot price of gold has climbed to a six-month high, buoyed by hopes that monetary tightening in western countries is largely done and dusted. China and India make up more than 50% of the physical gold market, giving the two Asian heavyweights a major influence on the likely price trajectory. In local currency terms gold is close to record highs in both China and India, and there are signs that this may be starting to impact on retail demand in both countries.