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 per cent 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 per cent to
$4,212.50 per ounce.
Oil prices fell and were on track for their first decline in
nearly a week.
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 per cent chance of a Fed rate hike
this month but are pricing in an 85 per cent 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 per cent to
$60.46 per ounce, platinum 0.5 per cent to $1,694.65, and
palladium fell 0.2 per cent to $1,141.23 per ounce.