PRECIOUS-Gold retreats on firm dollar ahead of U.S. inflation data

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(iterates, adds description, updates prices)

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* US CPI data is 1330 GMT . is payable on

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* Gold rally ahead of inflation data – Analyst

November 10 (Businesshala) – Gold prices fell on Wednesday as a firming dollar and yields rose ahead of US inflation data that could help investors gauge the path of the Federal Reserve’s monetary policy.

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Spot gold fell 0.3% to $1,825.40 an ounce, down 944 GMT. US gold futures for December delivery fell 0.2% to $1,826.50 an ounce.

“Gold is losing momentum in inflation data … a stronger-than-expected reading in US consumer prices will blow gold off the sails,” said Craig Erlam, senior market analyst at OANDA.

Bullion prices have hovered near two-month highs in the past few sessions following assurances from major central banks last week that interest rates would remain low for some time, with the Federal Reserve thinking that inflation is “temporary”.

Precious metals benefit from lower rates because they reduce the opportunity cost of holding gold, thereby earning no interest.

“Gold is benefiting from the prospect of central banks retreating against market expectations (to hike rates), but high inflation makes that task very difficult,” Erlam said.

A tight US labor market and dislocation in global supply chains could result in higher readings for US consumer prices due at 8:30 a.m. ET (1330 GMT).

Deposit pressure on gold, benchmark 10-year yield rose to 1.4762%. The dollar gained 0.1% against its rivals, making gold costlier for holders of other currencies.

Spot silver fell 0.3% to $24.22 an ounce and platinum fell 0.6% to $1,052.83 an ounce. Palladium fell 0.4% to $2,013.60 an ounce.

Reporting by Amy Karen Daniels in Bengaluru; Editing Aditya Soni

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