Gold rises as markets await US inflation data
Shafaq News
Gold ticked up on Tuesday as oil prices slipped, while markets focused on the upcoming US inflation data for fresh signals on the Federal Reserve's interest-rate trajectory.Spot gold was up 0.4% to $4,188.27 per ounce by 06:24 GMT after hitting a one-week peak on Monday.
US gold futures for December delivery rose 0.5% to $4,212.50 per ounce.Oil prices fell and were on track for their first decline in nearly a week.
Both benchmarks climbed nearly $2 a barrel in the previous session, with Brent settling at its highest since September 15.
Higher oil prices, driven by Middle East tensions, have raised inflation concerns and strengthened the case for restrictive monetary policy. While gold is considered a hedge against inflation, higher rates often push investors toward yield-bearing assets rather than the non-yielding metal.
The Consumer Price Index (CPI) is due on Wednesday, and the Producer Price Index (PPI) report is scheduled for Thursday.
"US CPI data will be critical for gold in the short term," said Kyle Rodda, senior financial market analyst at Capital.com.
If inflation comes in hotter than expected, particularly on the core measure, and prompts even a modest increase in expectations of an October rate hike, it could result in another dip in gold, he added.
Currently, traders see only a 19% chance of a Fed rate hike this month but are pricing in an 85% chance of a December increase, according to CME's FedWatch tool.
Cleveland Fed President Beth Hammack said the US central bank should move "relatively quickly" to a more restrictive monetary policy stance to control inflation, which she feels has become broader-based and is starting to influence firms' price-setting plans.
On the geopolitical front, Saudi Arabia said it was facing a new barrage of incoming fire and that Riyadh airport would remain shut for now, days after Saturday's deadly missile strike on a departure terminal that was claimed by Yemen's Iran-allied Houthis.
Among other metals, spot silver gained 0.2% to $60.46 per ounce, platinum 0.5% to $1,694.65, and palladium fell 0.2% to $1,141.23 per ounce.
(REUTERS)
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