Gold prices subdued as investors await US inflation data

GOLD prices struggled for momentum on Wednesday (Aug 10), as investors refrained from making big bets ahead of US inflation data that is expected to influence the pace of Federal Reserve rate hikes.

Spot gold was down 0.1 per cent at US$1,791.60 per ounce, as of 1.27 am GMT. US gold futures were down 0.2 per cent at US$1,808.20.

Analysts polled by Reuters expect US annual inflation to have eased to 8.7 per cent in July from 9.1 per cent in June. Core inflation is expected at 0.5 per cent month-on-month. The data is due at 12.30 pm GMT.

The Fed hiked rates by 75 basis points each in June and July to rein in soaring inflation. Although gold is seen as a hedge against inflation, higher US interest rates dull non-yielding bullion's appeal.

Fed funds futures traders are now pricing for a 69.5 per cent chance of another 75-basis-point rate increase at the US central bank's next policy meeting in September.

The dollar index held firm against its rivals, making gold less appealing for other currency holders.

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Benchmark US 10-year Treasury yields edged higher to 2.7883 per cent, increasing the opportunity cost of holding non-interest bearing gold.

Japanese wholesale prices rose 8.6 per cent in July from a year earlier, data showed, slowing from the previous month's pace in a sign inflationary pressure from higher fuel and raw material costs was easing.

Spot silver eased 0.1 per cent to US$20.48 per ounce, platinum was steady at US$933.59, and palladium was unchanged at US$2,215.29. REUTERS