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July 17, 2024
PI Global Investments

Gold edges higher as dollar slips ahead of US inflation data

Gold prices edged higher on Thursday, supported by a softer dollar ahead of a consumer inflation report due later in the day that could shed some light on the U.S. Federal Reserve’s interest rate trajectory.


* Spot gold was up 0.2% at $2,028.19 per ounce, as of 0135 GMT. U.S. gold futures rose 0.3% to $2,032.80.

* The dollar index fell 0.1%, making bullion more attractive for buyers holding other currencies.

* U.S. consumer price inflation report is due at 1330 GMT. Economists polled by Reuters see year-on-year inflation at 3.2% in December, but think core inflation likely fell to 3.8%, its lowest since mid-2021.

* U.S. producer prices will be released on Friday.

* Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

* Traders are betting on 140 basis points (bps) worth of interest rate cuts by the U.S. central bank this year and a 67% chance they begin as soon as March, according to LSEG’s interest rate probability app, IRPR.

* Elsewhere, Australia’s surplus on trade goods surged to an eight-month high in November as coal exports picked up and imports of cars slid after a run of strong months, data showed on Thursday.

* In wider financial markets, Japan’s benchmark Nikkei average opened 1.25% higher, while Asia-Pacific shares outside Japan fell 0.5%, on its seventh consecutive session of decline.

* Earlier this week, a New York Fed report said consumers expect a decline in inflation while Fed Governor Michelle Bowman stated that the U.S. central bank’s monetary policy seems “sufficiently restrictive”.

* Spot silver rose 0.5% to $22.96 per ounce, platinum climbed 0.2% to $920.40, and palladium gained nearly 1% to $1008.67.

DATA/EVENTS (GMT) 1330 US CPI Dec 1330 US Initial Jobless Clm w/e Jan. 6 1800 US 30Y Bond Auc — 2350 Japan Trade Balance Nov

(Reporting by Harshit Verma in Bengaluru; Editing by Sherry Jacob-Phillips)


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