Gold prices climbed on Tuesday as the
US dollar slipped, with focus on upcoming inflation data that
could shape expectations for the Federal Reserve’s next policy
move.
Spot gold was up 0.6 per cent at $4,429.89 per ounce, as of
0208 GMT. US gold futures for December delivery were
little changed at $4,475.10.
The US dollar index ticked 0.4 per cent lower, making
greenback-priced metals more affordable for other currency
holders.
“Gold remains locked in a battle between buyers and sellers,
with neither party showing enough conviction to drive a
sustained and persistent directional move,” said Chris Weston,
head of research at Pepperstone Group.
The US producer price index data is due on Thursday, and
the consumer price index data is scheduled for Friday.
Spot gold fell in the previous two sessions after data
showed US job growth accelerated sharply in August, while the
unemployment rate held steady at 4.1 per cent, suggesting an improvement
in the labor market.
According to the CME FedWatch Tool, traders currently see a
60 per cent chance of a rate hike at the Fed’s policy meeting next week.
Elevated rates tend to reduce the appeal of non-yielding gold.
“We don’t see gold falling back too much if and when the
central bank does raise rates. More important than the rate move
is the notion that markets are somewhat uneasy about what the
Fed and the Treasury are signalling,” Marex analyst Edward Meir
said in a monthly note.
On the geopolitical front, Iran threatened the United States
with “economic warfare” and said it had fired an advanced
missile at US warships, underscoring the risks of further
escalation in the war only days after both sides traded blows
again.
Among other metals, spot silver gained 1 per cent at $66.78
per ounce, platinum rose 0.4 per cent at $1,834.00, and palladium
firmed 1 per cent to $1,402.87.