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Gold set to end the weekly bullish

Gold is bullish today and is on track to end the week with its third consecutive weekly gain. The rally in the yellow metal is a result of a drop in the U.S. Treasury yields and the dollar index, giving the yellow metal a boost.

Gold futures is up 0.20%, currently trading at $1803.75 an ounce with prices rising 1.12% so far, for the week.

What you should know
On Thursday, the European Central Bank (ECB) set a new inflation target of 2% in the results of its 18-month review. The central bank added that it would also tolerate moderate overshoots.

The ECB’s approach contrasted with that of the U.S. Federal Reserve. The latter hinted at preparations to taper assets in the minutes from its June policy meeting released earlier in the week.

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Data released by China earlier in the day revealed that the producer price index (PPI) grew 8.8% year-on-year, slightly down from the 9% growth seen in May. The data also said consumer price index (CPI) grew a smaller-than-expected 1.1% year-on-year in June while contracting a bigger-than-expected 0.4% month-on-month.

What this means
Gold is still negative year to date (YTD) by 7.11%, after falling from June’s high of approximately $1,907 over U.S Federal Reserve policies. With the rising global inflation rate, the possibility of Gold’s YTD turning positive is still on the table as investors expect the masses to turn to the safe-haven asset, as a hedge against rising inflation.

Central banks from Serbia to Thailand have been adding to gold holdings. Also in Ghana, the country recently announced plans for purchases, as the worry of accelerating inflation looms and a recovery in global trade provides the firepower to make purchases.

For other precious metals, silver is currently up by 0.46%, trading at $26.11, palladium is up marginally by 0.07%, trading at $2,812.25 and platinum is up by 1.18%, currently trading at $1,087.25 at the time of writing this report.

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