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Why gold could struggle if CPI heats up

Gold & the bond market

There's nothing like a little inflation talk to bring out the gold bugs.

But analysts say even the prospect of slightly higher-than-expected U.S. inflation readings after Wednesday's higher-than-expected April PPI won't be much of a catalyst for prices, and could actually hold back gains.

Helped by a falling dollar and weaker global equities prices, gold rose Wednesday above the key psychological level of $1,300, a zone that often attracts buying. The August gold futures contract was at about $1,305 per troy ounce, while the front-month June futures contract on Comex was at $1,304.