Gold flat as investors gear up for US inflation report

The market is pricing in an 86 per cent chance that the Fed will leave rates unchanged in December.

COMEX gold speculators lowered their net long position by 1,107 contracts to 105,236 in week ended November 7. (Image source | Reuters)

Gold prices were flat in early Asian trading on Tuesday as markets await U.S. inflation data that could offer more clarity on the Federal Reserve’s interest rate outlook.

FUNDAMENTALS

Spot gold held its ground at $1,948.09 per ounce, as of 0118 GMT. U.S. gold futures edged 0.1 per cent higher to $1,952.30.

U.S. consumer prices index (CPI) data will be released on Tuesday. Wall Street economists expect the headline U.S. CPI to have slowed to a 0.1 per cent rise in October, from a 0.4 per cent increase in September, according to a Reuters poll.

TRENDING NOW

The core inflation number is expected at 0.3 per cent last month, unchanged from September. Also on the radar, the U.S. producer price index data due on Wednesday.

U.S. Fed officials, including Chair Jerome Powell, last week said they are still not sure interest rates are high enough to finish the battle with inflation.

The market is pricing in an 86 per cent chance that the Fed will leave rates unchanged in December, according to the CME FedWatch tool.

The expected path for inflation softened on balance in October amid rising expectations for future gasoline price hikes and a largely stable outlook for employment and personal finances, the Fed Bank of New York reported on Monday.

Meanwhile, COMEX gold speculators lowered their net long position by 1,107 contracts to 105,236 in week ended November 7, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.

Spot silver rose 0.4 per cent to $22.38 per ounce, while platinum gained 0.5 per cent to $868.49. Palladium climbed about 1 per cent to $990.81 per ounce.

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