Gold eases as investors eye US inflation data

[BENGALURU] Gold prices edged lower on Tuesday as a stronger dollar crimped bullion's appeal ahead of US inflation data that could offer cues on the possible timeline for the Federal Reserve's tapering.

Spot gold fell 0.2 per cent to US$1,790.74 per ounce by 1.38am GMT.

US gold futures eased 0.1 per cent to US$1,792.10.

The dollar index was steady after hitting a two-week high on Monday, making gold more expensive for holders of other currencies.

US consumer price data is due at 12.30pm GMT. Economists expect core CPI, an index which strips out volatile energy and food prices, to have risen 0.3 per cent in August from July.

Expectations of US consumers for how much inflation will change over the next year and the coming three years rose last month to the highest levels since 2013, according to a survey released on Monday by the New York Federal Reserve.

Inflation in the euro area will "in all likelihood" ease as soon as next year but the European Central Bank (ECB) is ready to act if it does not, ECB policymaker Isabel Schnabel said on Monday.

A city in China's south-eastern province of Fujian has closed cinemas and gyms, sealed off some entries and exits to highways and told residents not to leave town as it battles a local Covid-19 outbreak.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.2 per cent to 1,000.21 tonnes on Monday from 998.17 tonnes on Friday.

Silver fell 0.1 per cent to US$23.70 per ounce, platinum was down 0.1 per cent at US$959.71 and palladium rose 0.3 per cent to US$2,092.64.

REUTERS