Gold prices were flat on Tuesday, as
cautious investors awaited U.S. inflation data to gauge the size
of the Federal Reserve’s future interest rate hikes.
Spot gold was little changed at $1,724.19 per ounce
by 0729 GMT. Prices had hit a two-week high of $1,734.99 on
Monday as the dollar fell.
U.S. gold futures were down 0.3% at $1,734.90.
“There are expectations for inflation to become a lot softer
and that could help gold actually run a little bit further as
expectations could then be for less aggressive Fed hikes after
the September meeting,” said Matt Simpson, senior market analyst
at City Index.
“For us to be confident that bulls have regained control, we
probably need to see gold break above $1,740.”
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.
The reading puts focus on the Fed’s Sept. 20-21 policy
meeting, where the U.S. central bank is widely expected to
deliver another 75-basis-point interest rate hike.
“An upside surprise in U.S. inflation could see gold tanking
like a house of cards as aggressive rate hike expectations
beyond September mount,” Lukman Otunuga, senior research analyst
at FXTM said in a note, adding, there is strong support around
Even though gold is seen as a hedge against inflation,
higher interest rates increase the opportunity cost of holding
the bullion while boosts the dollar, in which the precious metal
For the day, the dollar index was down 0.2% hovering
near its lowest level since Aug. 26, touched in the previous
Spot silver fell 0.5% to $19.69 per ounce, having
recorded its biggest one-day percentage gain since February 2021
Platinum dipped 0.2% to $905.15 and palladium
shed 2.7% to $2,203.77, falling as much as 4.7% earlier.
(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi
Aich and Uttaresh.V)