Gold edges higher on softer dollar ahead of US inflation data

GOLD prices held firm on Tuesday (Sep 13) near a 2-week high hit in the previous session, helped by a subdued dollar, while investors awaited US inflation data that could provide cues on the Federal Reserve’s interest rate hike path.

Spot gold rose 0.1 per cent to US$1,725.70 per ounce, as of 12.41 am GMT.

US gold futures were down 0.2 per cent at US$1,736.80.

The dollar index hovered close to its lowest level since Aug 26, making the greenback-priced gold less expensive for overseas buyers.

US consumer price data, due at 12.30 pm GMT, is expected to show headline inflation rose 8.1 per cent year-over-year in August versus 8.5 per cent in July.

Fed will deliver another 75-basis-point interest rate hike next week and likely hold its policy rate steady for an extended period once it eventually peaks, according to a Reuters poll of economists released on Tuesday.

Higher interest rates increase the opportunity cost of holding the non-yielding bullion and boosts the dollar.

Germany’s economy, Europe’s largest, will contract next year as a dramatic rise in energy costs due to the war in Ukraine extinguishes the chances of recovery after pandemic-related lockdowns, the Ifo institute said on Monday.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.18 per cent to 964.91 tonnes on Monday from 966.64 tonnes on Friday.

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Gold inches up on subdued dollar; US inflation data looms

The London Bullion Market Association (LBMA) said on Monday that trade in precious metals in London would be suspended on Sep 19, the day of Queen Elizabeth’s funeral.

Spot silver rose 0.3 per cent to US$19.84 per ounce.

Platinum slipped 0.4 per cent to US$903.82 and palladium fell 0.3 per cent to US$2,259.04. REUTERS