Gold flat as investors seek direction from US inflation data

GOLD prices were listless on Tuesday (Nov 8) as investors held to the sidelines ahead of key US inflation figures, which are likely to influence the Federal Reserve’s rate-hike narrative.

Spot gold was flat at US$1,675.29 per ounce, as of 0034 GMT. Bullion prices hit a three-week peak in the previous session, buoyed by a weaker US dollar.

US gold futures fell 0.2 per cent to US$1,677.30.

The US consumer price index report is due on Thursday. Traders now expect a 65 per cent odds of a 50-basis-point rate hike at the Fed’s December meeting.

Gold is considered a hedge against inflation, but rising interest rates increase the opportunity cost of holding non-yielding bullion.

The European Central Bank must not stop raising interest rates until underlying inflation has clearly peaked, but it may slow the pace of hikes once rates hit a level that starts to restrict growth, France’s central bank chief told the Irish Times.

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Focus is also on the US midterm elections, which will determine control of Congress and could spur moves all over the market.

Spot silver was up 0.1 per cent at US$20.80. Platinum rose 0.1 per cent to US$980.09 and palladium also gained 0.1 per cent to$1,898.22.

Raising fears of a slowdown, China’s exports and imports unexpectedly contracted in October, as a perfect storm of Covid-19 curbs at home and global recession risks dented demand and further darkened the outlook for a struggling economy. REUTERS