PRECIOUS-Gold tracks dollar in choppy session; U.S. inflation data awaited

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(update prices)

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* US CPI data due Wednesday

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* US Yield, Dollar Slip

* Gold on the edge of breakout – Analyst

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Nov 9 (Businesshala) – Gold prices climbed to their highest level early Tuesday, with a softer dollar as investors awaited US inflation data later in the week.

As of 13:44 a.m. ET (1844 GMT), spot gold was up 0.3% to $1,828.74 an ounce, having previously recorded its highest since Sept. 3 at $1,831.10.

US gold futures closed 0.2% higher at $1,830.80.

The US dollar, which gold is tracking during the session, edged lower against its rivals, making bullion less expensive for holders of other currencies.

“Investors are cautious near $1,830-$1,835 as we haven’t been able to break through in July and August,” said Philip Strible, chief market strategist at Blue Line Futures in Chicago.

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.

“If the market sees that the Consumer Price Index number is higher than expected, it would certainly be argued that the Federal Reserve should now increase sharply,” said Quantitative Commodity Research analyst Peter Fertig. But “the Fed is not following a rule book,” he said.

Also, due to the rise in gold, the yield on the 10-year Treasury note came down to 1.4271%.

“Gold prices are on the verge of a breakout,” analysts at TD Securities said in a note. “Given the extremely poor sentiment in the precious metals over the past few months, the bar is low for prices to slide through trendline resistance.”

Elsewhere, spot silver fell 0.8% to $24.25 an ounce, platinum slipped 0.1% to $1,054.64 and palladium fell 2.4% to $2,021.35. (Reporting by Bharat Govind Gautam and Amy Karen Daniels in Bengaluru; Editing by Krishna Chandra Eluri)

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