Gold prices were subdued on Thursday, but held around a two-month high on concerns surrounding inflation and geopolitical tensions between Russia and Ukraine. <\/p>\n
Spot gold dipped 0.1 percent to $1,838.79 per ounce, while U.S. gold futures were down 0.2 percent at $1,839.<\/p>\n
Ahead of next week’s Federal Reserve policy meeting, U.S. President Joe Biden backed the central bank’s plans to scale back stimulus, saying taming inflation is a critical job for the Federal Reserve.<\/p>\n
He also indicated his $2 trillion economic agenda will have to be broken up so that a scaled back version can pass Congress.<\/p>\n
On Russia-Ukraine tension, Biden said the U.S. and its European allies are united on making sure Russia would face “severe economic consequences” if Putin attacks. He also suggested a full-scale invasion may not be in the Russian leader’s plans.<\/p>\n
Inflation worries returned to the fore after data showed Germany’s producer prices grew at the strongest pace since the series began in 1949, driven by higher energy prices.<\/p>\n
Producer prices grew 24.2 percent year-on-year in December, after rising 19.2 percent in November. This was the strongest year-on-year increase since the survey began in 1949 and also exceeded the economists’ forecast of 19.4 percent.<\/p>\n
On a monthly basis, producer price inflation advanced to 5.0 percent from 0.8 percent in November. Economists had forecast prices to climb again by 0.8 percent.<\/p>\n
Meanwhile, China stepped up its monetary easing efforts by cutting its mortgage reference rate for the first time in nearly two years.<\/p>\n
The People’s Bank of China reduced the one-year loan prime rate by 10 basis points to 3.70 percent. The five-year LPR was slashed by 5 basis points to 4.6 percent. <\/p>\n