Gold ticks up on softer dollar, U.S. inflation data in focus
Gold prices rose on Monday as the dollar
fell to a more than two-week low, prompting investors to buy
bullion, while markets eyed U.S. inflation data for further
clues on Federal Reserve rate hikes.
Spot gold was up 0.4% at $1,722.79 per ounce as of
U.S. gold futures rose 0.3% to $1,733.20.
The dollar index hovered close to its lowest level
since Aug. 26, making gold less expensive for holders of other
“Gold’s gains at the onset of this week should prove
temporary if the incoming U.S. CPI prints point to a stubborn
climb in inflation, forcing the Fed to keep the pedal to the
metal with its policy tightening,” Han Tan, chief market analyst
at Exinity, said.
“Data that underscores the Fed’s need to stay
ultra-aggressive in its battle against inflation, a theme that’s
been a constant thorn in gold bulls’ side for much of this year,
would only further weigh down the zero-yielding precious metal.”
The U.S. Consumer Price Index, due on Tuesday, is expected
to show that August prices rose at an 8.1% pace over the year,
compared with an 8.5% print for July.
“A further indication that inflation may have peaked would
be encouraging for the gold market,” said Clifford Bennett,
chief economist at ACY Securities.
Markets have ramped up their expectations for a 75 basis
point (bp) Fed hike this month to more than 90%. Gold tends to
suffer in a higher interest rate environment.
Fed officials on Friday ended their public comment period
ahead of the central bank’s Sept. 20-21 policy meeting, with
strong calls for another oversized rate increase to battle
Spot silver rose 2.1% to $19.18 per ounce, its
highest in more than two weeks.
Platinum was 1.5% higher at $893.98 and palladium
rose 0.5% to $2,183.49.
(Reporting by Arundhati Sarkar and Eileen Soreng in Bengaluru;
Editing by Edmund Klamann)
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