Gold flat as focus shifts to inflation data

GOLD prices were flat during early Asian hours on Friday (Dec 23), as traders awaited economic data due later in the day to gauge the Federal Reserve’s rate hike stance.

Spot gold was little changed at US$1,793.22 per ounce as of 0034 GMT. US gold futures rose 0.3 per cent to US$1,801.20.

Investors’ attention turns to personal consumption expenditure (PCE) data due at 1330 GMT, for cues on inflation.

Bullion prices dropped more than 1 per cent on Thursday after US economic data showed the country’s economy rebounded faster than previously estimated, boosting the dollar and potentially setting the Fed on a keener path to fight inflation.

New claims for unemployment benefits increased less than expected last week in the United States, while the economy rebounded faster in the third quarter, rising 3.2 per cent against the previously estimated 2.9 per cent.

Although gold is considered an inflation hedge, rising interest rates increase the opportunity cost of holding bullion since it pays no interest.

SEE ALSO

Gold steady as investors eye economic data

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The European Central Bank may raise rates at its current pace for a “period of time” to curb inflation, said vice-president Luis de Guindos.

Britain’s economy contracted more than first thought in the third quarter of this year, data showed on Thursday.

Spot silver fell 0.1 per cent to US$23.55, platinum gained 0.1 per cent to US$978.76 and palladium rose 0.2 per cent to US$1,683.50. REUTERS