Gold edges higher on softer dollar ahead of U.S. inflation data

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Gold prices held firm on Tuesday near a

two-week high hit in the previous session, helped by a subdued

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dollar, while investors awaited U.S. inflation data that could

provide cues on the Federal Reserve’s interest rate hike path.

FUNDAMENTALS

* Spot gold rose 0.1% to $1,725.70 per ounce, as of

0041 GMT.

* U.S. gold futures were down 0.2% at $1,736.80.

* The dollar index hovered close to its lowest level

since Aug. 26, making the greenback-priced gold less expensive

for overseas buyers.

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* U.S. consumer price data, due at 1230 GMT, is expected to

show headline inflation rose 8.1% year-over-year in August

versus 8.5% in July.

* Fed will deliver another 75-basis-point interest rate hike

next week and likely hold its policy rate steady for an extended

period once it eventually peaks, according to a Reuters poll of

economists released on Tuesday.

* Higher interest rates increase the opportunity cost of

holding the non-yielding bullion and boosts the dollar.

* Germany’s economy, Europe’s largest, will contract next

year as a dramatic rise in energy costs due to the war in

Ukraine extinguishes the chances of recovery after

pandemic-related lockdowns, the Ifo institute said on Monday.

* Holdings of SPDR Gold Trust , the world’s largest

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gold-backed exchange-traded fund, fell 0.18% to 964.91 tonnes on

Monday from 966.64 tonnes on Friday.

* The London Bullion Market Association (LBMA) said on

Monday that trade in precious metals in London would be

suspended on Sept. 19, the day of Queen Elizabeth’s funeral.

* Spot silver rose 0.3% to $19.84 per ounce.

Platinum slipped 0.4% to $903.82 and palladium

fell 0.3% to $2,259.04.

DATA/EVENTS (GMT)

0600 Germany HICP Final YY Aug

0600 UK Claimant Count Unem Change Aug

0600 UK ILO Unemployment Rate Jul

0600 UK HMRC Payrolls Change Aug

0900 Germany ZEW Economic Sentiment Sep

0900 Germany ZEW Current Conditions Sep

1230 US CPI MM, SA Aug

1230 US CPI Wage Earner Aug

(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi

Aich)