Gold edges higher on softer dollar; US inflation data in focus

GOLD prices rose on Tuesday (Apr 11) after falling more than 1 per cent in the previous session, as the dollar eased while investors awaited this week’s US inflation data that could influence the Federal Reserve’s monetary policy trajectory.

Spot gold was up 0.2 per cent at US$1,994.48 per ounce, as of 0036 GMT. US gold futures rose 0.1 per cent to US$1,994.60.

The dollar index was 0.1 per cent lower, making bullion less expensive for other currency holders.

Investors are now awaiting the US consumer price data due on Wednesday for more clarity on the path of rates heading into the Fed’s May policy meeting.

A strong US employment report released on Friday raised bets that the US central bank would raise interest rates next month, with markets pricing in a 71.3 per cent chance of a 25 basis-point hike, according to the CME FedWatch tool.

Americans said last month that access to credit was at its toughest level in nearly a decade, as they also braced for higher levels of inflation over the next few years, a report from the New York Fed said.

The opportunity cost of holding non-yielding bullion rises when interest rates are increased to bring down inflation.

Federal Reserve Bank of New York president John Williams said on Monday that financial system troubles that drove the central bank to provide large amounts of credit to banks was not collateral damage from the Fed’s aggressive effort to lower inflation.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.25 per cent to 933.22 tonnes on Monday, from 930.91 tonnes on Thursday.

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Spot silver inched up 0.1 per cent to US$24.91 per ounce, platinum firmed 0.3 per cent to US$994.64 and palladium gained 1.3 per cent to US$1,429.54. REUTERS