Gold ticks up on softer dollar, spotlight on U.S. inflation data


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Gold prices gained on Tuesday supported by

a softer dollar, while market participants awaited U.S.

inflation data for cues on the Federal Reserve’s policy

tightening path.

Spot gold was 0.4% higher at $1,794.76 per ounce by

10:52 a.m. ET (1452 GMT), while U.S. gold futures rose

0.4% to $1,811.40.

A weaker greenback makes gold less expensive for overseas

buyers. The dollar index was down 0.3%.

Gold is currently benefiting from a softer dollar and the

Russia-Ukraine situation, while the focus is on what happens

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with CPI on Wednesday, said Daniel Pavilonis, senior market

strategist at RJO Futures.

The U.S. consumer price report for July is due at 8:30 a.m.

ET (1230 GMT) on Wednesday. A New York Federal Reserve survey

showed on Monday that U.S. consumers’ expectations for where

inflation will be in a year and three years dropped sharply in

July.

Lately, gold has been facing pressure as various central

banks have been hiking interest rates to tame surging inflation.

The precious metal is considered a hedge against inflation and

political uncertainties, but higher rates make non-yielding

bullion less attractive.

“A softer inflation number tomorrow, particularly on the

core side, could be the catalyst (for gold prices) for a

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breakout to the upside, while a stronger number could put $1,800

out of reach for the foreseeable future,” OANDA analyst Craig

Erlam said in a note.

Ahead of the inflation report, analysts polled by Reuters

expect annual inflation to have eased to 8.7% from 9.1% in June.

Meanwhile, the Bank of England will probably have to raise

interest rates further to tackle inflation pressures that are

gaining a foothold in Britain’s economy, BoE Deputy Governor

Dave Ramsden said.

Spot silver fell 0.9% to $20.46 per ounce, while

platinum was down 0.6% at $934.02.

Palladium rose more than 1% to $2,255.54.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by

Shailesh Kuber and Shounak Dasgupta)

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