Gold may face another round of correction
Gold price bit a two-day decline as inflation in China and India accelerated and Greece’s sovereign- debt crisis degraded. Demand for precious metals showed to be still strong. Silver, platinum and palladium also rallied.
Immediate-delivery gold went up as much as 0.5 percent to $1,523.02 an ounce and was at $1,522.13 by 2:48 p.m. in Singapore. Gold for August delivery rose as much as 0.5 percent to $1,523.40 an ounce.
China’s consumer prices leapt 5.5 percent last month, the fastest pace in almost three years, the statistics bureau said in Beijing. India’s wholesale inflation rose 9.06 percent from a year ago in May after an 8.66 percent jump in April, data showed today. Greece was branded with the lowest credit rating for any sovereign nation by Standard & Poor’s, which said that the country may default.
Gold is the main beneficiary of rising inflation, as secures value for investors. Still the metal’s upward momentum is not strong enough to push through the $1,550 level again, which suggests gold may face another round of correction.