Gold prices slip to 3-month low ahead of US inflation data

GOLD prices eased on Wednesday (May 11) to a 3-month low as an elevated dollar continued to pressure bullion while investors await monthly US inflation data, which could have some impact on the Federal Reserve's monetary policy stance.

Spot gold was down 0.3 per cent at US$1,832.06 per ounce, as of 12.46 am GMT. US gold futures fell 0.5 per cent to US$1,832.10.

Gold prices fell for a third consecutive session to hit their lowest level since Feb 11.

The dollar hovered near recent 20-year highs, making greenback-priced bullion less attractive for other currency holders.

Market participants will be keeping a close eye on US consumer price index (CPI) data for April due at 12.30 pm GMT later in the day.

Analysts expect the CPI to show a sharp pullback in monthly growth, cooling to 0.2 per cent in April from 1.2 per cent in March - the biggest monthly jump in more than 16 years - and an annual increase of 8.1 per cent, 0.4 percentage point lower than the prior 8.5 per cent, which was the hottest reading since December 1981.

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Fed officials on Tuesday fortified their arguments for the swiftest series of interest rate hikes since at least the 1990s to combat inflation, while President Joe Biden urged the US central bank to tame the price increases he said were hurting American households.

Gold is seen as a hedge against inflation and a safe store of value during times of political and economic crises, but is highly sensitive to rising short-term US interest rates, which raise the opportunity cost of holding zero-yield bullion.

Spot silver dipped 0.1 per cent to US$21.23 per ounce, while platinum edged higher 0.1 per cent to US$964.64, and palladium fell 1.2 per cent to US$2,040.25. REUTERS