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