Gold gains as greenback eases with US inflation data on radar

[BENGALURU] Gold prices climbed on Tuesday (Sep 8) as the US dollar slipped, with focus on upcoming inflation data that could shape expectations for the US Federal Reserve’s next policy move.

Spot gold was up 0.6 per cent at US$4,429.89 per ounce as at 0208 GMT. US gold futures for December delivery were little changed at US$4,475.10.

The US dollar index ticked 0.4 per cent lower, making greenback-priced metals more affordable for other currency holders.

“Gold remains locked in a battle between buyers and sellers, with neither party showing enough conviction to drive a sustained and persistent directional move,” said Chris Weston, head of research at Pepperstone Group.

The US producer price index data is due on Thursday, and the consumer price index data is scheduled for Friday.

Spot gold fell in the previous two sessions after data showed US job growth accelerated sharply in August, while the unemployment rate held steady at 4.1 per cent, suggesting an improvement in the labour market.

According to the CME FedWatch Tool, traders currently see a 60 per cent chance of a rate hike at the Fed’s policy meeting next week. Elevated rates tend to reduce the appeal of non-yielding gold.

“We don’t see gold falling back too much if and when the central bank does raise rates. More important than the rate move is the notion that markets are somewhat uneasy about what the Fed and the Treasury are signalling,” Marex analyst Edward Meir said in a monthly note.

On the geopolitical front, Iran threatened the US with “economic warfare” and said it had fired an advanced missile at US warships, underscoring the risks of further escalation in the war only days after both sides traded blows again.

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Among other metals, spot silver gained 1 per cent to US$66.78 per ounce, platinum rose 0.4 per cent to US$1,834.00, and palladium firmed 1 per cent to US$1,402.87. REUTERS