Gold inches higher ahead of US CPI data

Bengaluru — Gold prices nudged higher on Thursday, while traders await a key US inflation data due later in the day to gauge the Federal Reserve’s future monetary policy stance.

Spot gold rose 0.2% to $2,614.00/oz by 2.46am GMT, after easing for the previous six sessions. Prices scaled a record high last month. US gold futures gained 0.2% at $2,631.40.

The US consumer price index (CPI) for September is due at 12.30pm GMT and producer price index (PPI) data on Friday.

“If core CPI comes hotter, US treasury yields will go higher and that is bad for gold. I think there is room for prices to come down, but don’t necessarily see a downtrend in the big picture,” said Ilya Spivak, head of global macro, Tastylive.

Markets see an 80% chance of a 25 basis point (bp) Fed rate cut in November.

A “substantial majority” of Fed officials at the September meeting supported beginning an era of easier monetary policy with an outsize half-point rate cut, but agreed that further easing will be data-driven, according to its minutes.

If there was a big geopolitical shock triggered by the situation in the Middle East and with the Fed in an easing cycle, there was still a chance for the bullion to scale another record in 2024, Spivak said.

The zero-yielding bullion is preferred in a low-interest rate environment as well as amid periods of economic and geopolitical turmoil.

San Francisco Fed Bank president Mary Daly said one or two more rate cuts in 2024 were likely if the economy evolved as she expected. Dallas Fed Bank president Lorie Logan called for gradual cuts and said that the US central bank should not rush.

Meanwhile, Israel’s plans to strike Iran added to the concern of rising tension in the Middle East.

Spot silver rose 0.3% to $30.60, platinum added 1.4% to $958.60 and palladium firmed 1.3% to $1,052.61.

Reuters