Gold futures hit low point

Gold steadied near the lowest in more than nine months as the dollar edged higher in anticipation of U.S. inflation data this week that’s set to shape the magnitude of the Federal Reserve’s next rate hike.

Investors concerned about the prospect of a global economic downturn have turned in droves to the greenback, which is already up more than 2% this month.

That’s capped gold, despite support from an easing in U.S. Treasury yields.

“Any significant or lasting rise in the gold price is being precluded not only by the firm U.S. dollar but also by the ongoing and robust ETF outflows,” Commerzbank AG analyst Carsten Fritsch said in a note.

“The gold ETFs tracked by Bloomberg registered outflows of 29 tons last week, their most pronounced in eight weeks and the fourth week in a row (with growing momentum).”

Gold has been on a roller coaster this year as Russia’s invasion of Ukraine spurred a rally in the haven to well above $2,000 an ounce in March, only for the momentum to fade as the growth and inflation outlook shifted.

In recent weeks, investors have cut holdings in bullion-backed exchange-traded funds.

U.S. inflation figures this week may stiffen the resolve of Fed policymakers to proceed with another big increase in interest rates later this month.

Economists estimate the gauge climbed 8.8% in June from a year earlier to a fresh four-decade high.

“If it’s a huge drop that would chop markets,” said Liberum Capital analyst Tom Price, “gold’s not moving much because the institutional dudes are just waiting for the next FOMC.”

Spot gold was down 0.2% at $1,729.79 an ounce at 10:52 a.m. in New York, after earlier falling to $1,723.32, the lowest intraday price since Sept. 30.

Peloton rallies after decision

Peloton Interactive Inc. rallied as much as 6.8% on Tuesday after announcing plans to cease in-house manufacturing and rely solely on partners for production, marking one of the most dramatic steps yet to simplify its operations and reduce costs.

The move is an about-face from Peloton’s strategy over the past three years, when it split manufacturing between its own facilities and partners.

The company built a portion of its standard Bike models and the higher-end Bike+ using facilities it acquired in 2019 as part of buying Tonic Fitness Technology.

It also relied on Taiwan-based manufacturing partner Rexon Industrial Corp. to build bikes and its Tread treadmill.

Now, the company will cease operating its Tonic facilities and move all of its bike and treadmill manufacturing to Rexon, Chief Supply Chain Officer Andrew Rendich told Bloomberg News in an interview.

“We are going back to nothing but partnered manufacturing,” he said. “It allows us to ramp up and ramp down based on capacity and demand.”

The news sent the stock on its biggest intraday gain since July 5. The shares were up 3.6% to $9.25 as of 12:04 p.m. in New York trading.

Peloton is making the change after several months of turmoil.

From wire reports

In February, co-founder John Foley was replaced as chief executive officer by veteran media executive Barry McCarthy, and the company cut nearly 3,000 employees – including many members of its executive team.

Rendich was appointed to his role in March.

A stock market juggernaut in the early days of the pandemic, Peloton has seen its share price fall about 75% this year.

As gyms and economies started to reopen last year, Peloton’s growth sputtered.