PRECIOUS-Gold steadies near 2-month high as U.S. inflation data in focus

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(update prices)

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* US CPI data due Wednesday

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* US yields fall, dollar weakens

November 9 (Businesshala) – Gold prices held near two-month highs on Tuesday, taking support from easing US yields and a weaker dollar, which could shed more light on the US inflation picture.

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Spot gold was up 0.05% to $1,825.24 an ounce as of 1156 GMT, down nearly $2 from its September 7 high. US gold futures for December delivery fell 0.03% to $1,827.50 an ounce.

“In the short term, markets will examine economic data to find out whether central banks will move sooner or later,” said Peter Fertig, a quantitative commodity research analyst.

“If the market sees that the Consumer Price Index numbers are well above expectations, the argument would certainly be made that the Federal Reserve should now increase sharply,” Fertig said. But “the Fed is not following a rule book,” he said.

Major central banks indicated last week that interest rates would remain low in the near term, boosting the appeal of non-yielding gold and helping the metal to its best week since late August.

However, a tight US labor market and dislocation in global supply chains could result in higher readings for US consumer prices on Wednesday.

Gold surged that day, with the US dollar down about 0.1%, making the metal cheaper for holders of other currencies, and yields on 10-year Treasury notes fell to 1.4567%.

“A move through $1,825 (in gold) could trigger a technical pattern that could take gold back into the $2,000 area,” Jeffrey Haley, senior market analyst at OANDA, said in a note.

Elsewhere, spot silver fell 0.2% to $24.40 an ounce. Platinum rose 0.05% to $2,068.60 an ounce and palladium fell 0.09% to $2,068.60 an ounce.

Reporting by Amy Karen Daniels in Bengaluru; Editing by Aditya Soni, Kirsten Donovan


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