Gold close to 1-month high with focus on US inflation data – Markets
NEW YORK: Gold stabilized near a one-month high on Wednesday, although prices remained stuck in a narrow range with gains dampened by a slight rise in the dollar and cautious investors ahead of the release US inflation data.
Spot gold was unchanged at $1,712.09 an ounce as of 12:08 p.m. ET (1708 GMT). US gold futures also held steady at $1,715.80.
Bullion prices rose more than 2% to break the key $1,700 level on Tuesday.
Gold is holding near the top of the range despite gains in the dollar index, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago. “I would be a little defensive about gold coming into tomorrow’s CPI data.” The US Consumer Price Index (CPI) report for October will provide the latest data on US inflation following the Federal Reserve’s aggressive interest rate hikes.
Economists expect core monthly and annual inflation to decelerate to 0.5% and 6.5%, respectively.
Gold is very sensitive to rising US interest rates, as they increase the opportunity cost of holding non-performing bullion. Higher rates are also boosting the dollar, putting pressure on the precious metal at the price of the greenback.
The dollar index rose 0.5% after falling to near a two-week low on Tuesday.