Gold flat as US inflation test looms

GOLD prices were flat during early Asian hours on Wednesday (May 10), as traders positioned themselves for inflation data that could impact the US Federal Reserve’s policy stance.

Spot gold was unchanged at US$2,035.39 per ounce, as of 0031 GMT. US gold futures were steady at US$2,043.50.

The US consumer price index (CPI) data is due at 1230 GMT.

Markets are currently pricing in a 83 per cent chance of the US central bank holding rates at their current level in June.

On Tuesday, Fed governor Philip Jefferson said the US economy is slowing in an “orderly fashion”, while New York Fed president John Williams said it is too soon to say whether the US central bank is done raising interest rates.

Although gold is considered a hedge against inflation, rising interest rates dull non-yielding bullion’s appeal.

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Gold eases as investors brace for US inflation data

China’s imports contracted sharply in April, while exports rose at a slower pace, reinforcing signs of feeble domestic demand.

President Joe Biden and top lawmakers agreed on Tuesday to further talks aimed at breaking a deadlock over raising the US$31.4 trillion US debt limit, with just three weeks before the country may be forced into an unprecedented default.

Spot silver rose 0.2 per cent at US$25.66 per ounce, platinum edged 0.2 per cent higher to US$1,106.35, and palladium gained 0.4 per cent at US$1,576.33. REUTERS