PRECIOUS-Gold climbs as dollar weakens ahead of U.S. inflation data

PRECIOUS-Gold climbs as dollar weakens ahead of U.S. inflation data

Reuters  | Feb 14, 2018 05:50

PRECIOUS-Gold climbs as dollar weakens ahead of U.S. inflation data

* Dollar edges down versus currency basket

* Markets eye U.S. inflation data due on Wednesday

* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl (Recasts throughout, updates prices; adds comment, NEW YORK to dateline)

By Renita D. Young and Jan Harvey

NEW YORK/LONDON, Feb 13 (Reuters) - Gold prices rose on Tuesday as the U.S. dollar slipped and markets anticipated the release of impending U.S. inflation data that may offer some clues on the pace of future U.S. interest rate increases.

The dollar .DXY dropped against a basket of major world currencies, reversing some of last week's gains, when it enjoyed its best performance since 2016.

A retreat in the dollar, in which bullion is priced, has helped gold pull back nearly 2 percent from last week's one-month low of $1,306.81 an ounce.

Spot gold XAU= was up 0.4 percent at $1,327.52 per ounce by 1:34 p.m. EST (1834 GMT), earlier hitting a one-week high of $1,330.89 while U.S. gold futures GCv1 futures for April delivery settled up $4, or 0.3 percent, at $1,330.40.

While bullion is sometimes seen as a safe haven asset against risk, it benefited little last week from the slide in equities as investors moving out of stocks broadly sought refuge in the dollar. MKTS/GLOB

"The weaker U.S. dollar index really provides some underlying support for gold today," said Phillip Streible, senior commodities strategist at RJO Futures. "Some of the investors are a little more confident with the chart action of gold since it held the 50-day moving average."

U.S. bond yields and world equity markets dipped ahead of a widely anticipated U.S. inflation report later this week that may provide some indication of the pace of future interest rate hikes by the Federal Reserve. MKTS/GLOB

"GDP and CPI should be very indicative to whether the Fed will be able to raise the (interest) rates or not," said Walter Pehowich, executive vice president of investment services at Dillon Gage Metals.

Inflation is sometimes regarded as gold-positive, because bullion is seen as a safe haven when price pressures are rising, but expectations that the U.S. Federal Reserve will lift interest rates to fight inflation make the non-yielding metal less attractive.

Meanwhile, silver XAG= was up 0.2 percent at $16.57 an ounce, after touching a one-week high of $16.69, while platinum XPT= was up 0.3 percent at $973.

Palladium XPD= was up 0.2 percent at $986.40 per ounce. The autocatalyst metal has slid nearly 14 percent since hitting a record $1,138 in mid-January but remains at elevated levels on expectations that the market will remain in deficit for a while yet.

"Over time, prices will provide the incentive to right palladium's balance, driving substitution in autocatalysts and industrial uses, as well as supporting the expansion of both recycling and new production capacity," ICBC Standard Bank said in a note.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Fusion Media will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Trading or investing in cryptocurrencies carries with it potential risks. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Cryptocurrencies are not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument or cryptocurrencies you should carefully consider your investment objectives, level of experience, and risk appetite.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures), Forex and cryptocurrencies prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (South Africa) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+