Investing.com - Gold climbed in Asia on Wedneday, continuing a recovery from multi-month lows last week.
Gold futures for August delivery edged up 0.37% to $1,219.23 as of mid-morning.
Gold has been rebounding this week after stronger than expected economic data out of the U.S., a subdued inflation picture in China and a narrower than expected current account surplus in Japan. A strengthening in other commodity prices like oil and iron have also helped while political uncertainty in the U.S. has taken some of the shine off the US dollar.
Gold and the dollar typically move in opposite directions, which means if the dollar goes down, gold futures, which are denominated in the U.S. currency, will rise. The U.S. dollar index, which measures the greenbackís strength against a trade-weighted basket of six major currencies, was down 0.11% to 95.38 as of mid-morning. The gold U.S. dollar index was up 0.19% to 1,219.70.
On Monday, China reported that the Consumer Price Index rose 1.5% year-on-year in June and the Producer Price Index rose 5.5%.
Earlier, Japan reported its unadjusted current account surplus at •1.654 trillion, narrower than the •1.796 trillion expected, while core machinery orders fell 3.6% on year in May, compared to a gain of 7.7% seen. USD/JPY changed hands at 113.98, up 0.06%.
Investors are now looking forward to US Federal Reserve Chair Janet Yellen's testimony on monetary policy as well as U.S. data on inflation and retail sales, due out on Friday. Trade data from China on Thursday should also give markets some direction.
The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has raised doubts over whether officials will be able to stick to their planned tightening path. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar.
Last week, gold prices dropped to almost four-month lows on Friday.
The U.S. economy added 222,000 jobs last month the Labor Department reported, more than the 179,000 new jobs expected by economists.