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

GOLD prices edged down on Monday (Feb 13) as the dollar firmed, while investors awaited this week’s US inflation data for cues on the Federal Reserve’s interest rate hike path.

Spot gold was down 0.2 per cent at US$1,861.76 per ounce, as of 0032 GMT. US gold futures eased 0.1 per cent to US$1,872.40.

The dollar edged up 0.1 per cent against its rivals. A stronger dollar makes greenback-priced gold more expensive for buyers holding other currencies.

Philadelphia Federal Reserve resident Patrick Harker said on Friday the surprisingly strong jobs data reported earlier this month did not alter his view that moving to smaller interest rate rises was a good strategy for the US central bank, as he flagged the prospect of rate cuts in 2024 should inflation continue to ease.

Market participants are now expecting the Fed’s target rate to peak at 5.177 per cent in July.

Bullion is considered an inflation hedge, but rising interest rates dent the non-yielding asset’s appeal.

Data on Tuesday is likely to show the US monthly consumer prices climbing 0.4 per cent month-on-month in January and the core CPI gaining 0.4 per cent as well, according to a Reuters survey of economists.

US consumer sentiment improved to a 13-month high in February, but households expected higher inflation to persist over the next 12 months, a survey showed on Friday.

Benchmark 10-year note yields on Friday touched their highest since Jan 6.

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Gold eases as steady dollar, US rate-hike outlook dent appeal

Physical gold buyers in some Asian hubs were drawn to a dip in domestic prices last week, while central bank demand kept premiums firm in China.

Spot silver fell 0.4 per cent to US$21.90 per ounce, platinum lost 0.3 per cent to US$942.19, while palladium rose 0.3 per cent to US$1,547.46. REUTERS