Gold price continued to recover on Tuesday with the benchmark Comex contract rising to as high as 1258. While the overall picture remains benign, China’s headline CPI in June has raised the need for inflation hedge. Headline inflation rose to +2.7% y/y in June, up from +2.1% a month ago. The reading on monthly basis stayed flat, indicating the improvement from a year ago was driven mainly by the price weakness last year. The low non-food inflation signaled that the output gap continued to grow.
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Gold Recovered Further as Chinese Inflation Data Triggered Inflation Hedge
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