PRECIOUS-Gold prices subdued as investors await U.S. inflation data

  • 9/14/2021
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* Spot gold may retest resistance at $1,798/oz - technicals * Holdings of SPDR Gold Trust rose 0.2% on Monday * U.S. consumer price data due at 1230 GMT (Updates prices) Sept 14 (Reuters) - Gold prices were little changed on Tuesday, as investors awaited key U.S. inflation data that could offer cues on the Federal Reserve’s decision to taper stimulus measures meant to aid economic recovery from the pandemic. Spot gold inched 0.1% lower to $1,792.31 per ounce by 0657 GMT, U.S. gold futures were flat at $1,793.60. “A modest acceleration (in inflation) reinforces the idea that the Fed is likelier to make a more formal announcement that a taper is imminent,” DailyFX currency strategist Ilya Spivak said. “The reaction from gold is going to be negative because the prospect of reducing stimulus is something that bids up yields.” Higher Treasury yields translate into higher opportunity cost for holding non-interest bearing bullion. U.S. consumer price data is due at 1230 GMT. Economists expect core CPI, an index that strips out volatile energy and food prices, to have risen 0.3% in August from the prior month. “Another heightened print may serve as a data point challenging some Federal Reserve policymakers’ views that inflation will be transitory,” Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note. The data comes ahead of the key policy meeting by the Federal Reserve on Sept. 21-22, where markets will keep a close eye on central bank’s announcement on when it will start winding up its pandemic-era bond-buying programme. On the technical front, spot gold may retest a resistance at $1,798, and a break above could lead to a gain at $1,807, according to Reuters technical analyst Wang Tao. The dollar index was steady after hitting a two-week high on Monday. Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.2% to 1,000.21 tonnes on Monday from 998.17 tonnes on Friday. Silver fell 0.1% to $23.69 per ounce, platinum dipped 0.4% to $957.33, while palladium slipped 0.7% to $2,072.78.

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