Gold inches higher, spotlight on US inflation data

GOLD prices inched up on Tuesday (Feb 14) as the dollar pulled back, with investors bracing for US inflation data to gauge its influence on the Federal Reserve’s policy path.

Spot gold was up 0.1 per cent at US$1,856.01 per ounce, as of 0048 GMT, after falling to its lowest since early January in the previous session. US gold futures edged 0.1 per cent higher to US$1,865.60.

The dollar index slipped 0.1 per cent, making greenback-priced gold less expensive for buyers holding other currencies.

Tuesday’s January US consumer price index (CPI) data is expected to show the core CPI figure gaining 0.4 per cent month-on-month.

The Fed will need to continue to raise interest rates in order to get them to a level high enough to bring inflation back down to the central bank’s target rate, Fed governor Michelle Bowman said on Monday.

Rising rates dim bullion’s appeal as they increase the opportunity cost of holding the non-yielding asset.

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Gold ticks lower as dollar firms, US inflation data in focus

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Money markets expect the Fed’s target rate to peak at 5.195 per cent in July, from a current range of 4.5 per cent to 4.75 per cent.

The head of the International Monetary Fund (IMF) said on Monday financial markets have good reason to be more upbeat, pointing to the US economy likely avoiding recession and China’s reopening from pandemic controls.

Spot silver rose 0.1 per cent to US$21.98 per ounce, platinum edged up 0.1 per cent to US$954.87, while palladium firmed 0.2 per cent to US$1,569.85. REUTERS