Gold edges higher as dollar slips ahead of US inflation data

GOLD prices edged higher on Thursday (Jan 11), supported by a softer US dollar ahead of a consumer inflation report due later in the day that could shed some light on the US Federal Reserve’s interest rate trajectory.

Spot gold was up 0.2 per cent at US$2,028.19 per ounce, as at 0135 GMT. US gold futures rose 0.3 per cent to US$2,032.80.

The US dollar index fell 0.1 per cent, making bullion more attractive for buyers holding other currencies.

US consumer price inflation report is due at 1330 GMT. Economists polled by Reuters see year-on-year inflation at 3.2 per cent in December, but think core inflation likely fell to 3.8 per cent, its lowest since mid-2021.

US producer prices will be released on Friday.

Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

Traders are betting on 140 basis points worth of interest rate cuts by the US central bank this year and a 67 per cent chance they begin as soon as March, according to LSEG’s interest rate probability app, IRPR.

Elsewhere, Australia’s surplus on trade goods surged to an eight-month high in November as coal exports picked up and imports of cars slid after a run of strong months, data showed on Thursday.

In wider financial markets, Japan’s benchmark Nikkei average opened 1.25 per cent higher, while Asia-Pacific shares outside Japan fell 0.5 per cent, on its seventh consecutive session of decline.

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Gold holds steady ahead of US inflation print

Earlier this week, a New York Fed report said consumers expect a decline in inflation while Fed governor Michelle Bowman stated that the US central bank’s monetary policy seems “sufficiently restrictive”.

Spot silver rose 0.5 per cent to US$22.96 per ounce, platinum climbed 0.2 per cent to US$920.40, and palladium gained nearly 1 per cent to US$1008.67. REUTERS