Gold prices ticked lower on Tuesday, as
cautious investors awaited U.S. inflation data to get clues on
how aggressive the Federal Reserve needs to be in raising
Spot gold fell 0.2% to $1,721.15 per ounce by 0439
GMT. Prices had hit a two-week high at $1,734.99 in the previous
session as the dollar fell.
U.S. gold futures were down 0.5% at $1,732.
“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.
However “more volatile move will come if we don’t see that
happen and that’s where you could see gold really come under
pressure… 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 meeting next week. A
Reuters poll of economists expects the central bank to deliver
another 75-basis-point interest rate hike and likely hold its
policy rate steady for an extended period once it eventually
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
On the day, the dollar index was steady near a
Spot silver fell 0.7% to $19.65 per ounce, having
recorded its biggest one-day percentage gain since February 2021
Platinum slipped 0.8% to $899.97 and palladium
shed 4% to $2,184.67 after falling as much as 4.5% earlier.
(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi
Aich and Uttaresh.V)