Gold edges higher on softer dollar ahead of U.S. inflation data

Tue Sep 13 2022
Lucy Harlow (4075 articles)
Gold edges higher on softer dollar ahead of U.S. inflation data

Gold prices held firm on Tuesday near a two-week high hit in the previous session, helped by a subdued dollar, while investors awaited U.S. inflation data that could provide cues on the Federal Reserve’s interest rate hike path.

Spot gold rose 0.1% to $1,725.70 per ounce, as of 0041 GMT.

U.S. gold futures were down 0.2% at $1,736.80.

The dollar index hovered close to its lowest level since Aug. 26, making the greenback-priced gold less expensive for overseas buyers.

U.S. consumer price data, due at 1230 GMT, is expected to show headline inflation rose 8.1% year-over-year in August versus 8.5% in July.

Fed will deliver another 75-basis-point interest rate hike next week and likely hold its policy rate steady for an extended period once it eventually peaks, according to a Reuters poll of economists released on Tuesday.

Higher interest rates increase the opportunity cost of holding the non-yielding bullion and boosts the dollar.

Germany’s economy, Europe’s largest, will contract next year as a dramatic rise in energy costs due to the war in Ukraine extinguishes the chances of recovery after pandemic-related lockdowns, the Ifo institute said on Monday.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.18% to 964.91 tons on Monday from 966.64 tons on Friday.

The London Bullion Market Association said on Monday that trade in precious metals in London would be suspended on Sept. 19, the day of Queen Elizabeth’s funeral.

Spot silver rose 0.3% to $19.84 per ounce. Platinum slipped 0.4% to $903.82 and palladium fell 0.3% to $2,259.04.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe