LONDON: Gold dipped on Thursday, but held near record-highs above the USD3,600 mark, as a modest recovery in the dollar and profit-taking pressured prices, while investors waited for US consumer inflation figures due later today.
Spot gold was down 0.5percent at USD3,621.19 per ounce, as of 1016 GMT. Bullion hit a record high of USD3,673.95 on Tuesday. US gold futures for December delivery fell 0.6 percent to USD3,659.70.
The US dollar index rose 0.2 percent to a near one-week high against rivals, making greenback-priced gold more expensive for overseas buyers. “Gold seems to be slightly pressured by a stabilizing dollar and profit-taking today. Nevertheless, the precious metal remains firmly bullish above the psychological USD3,600 level with yesterday’s surprise drop in US producer prices limiting the downside,” said Lukman Otunuga, senior research analyst at FXTM.
US producer prices unexpectedly fell in August due to lower trade services margins and modest increases in goods costs, data released on Thursday showed.
Weaker-than-expected nonfarm payroll data last week, along with revised estimates revealing 911,000 fewer jobs in the 12 months through March, have reinforced expectations of monetary easing. Investors now await weekly jobless claims and US CPI data, due at 1230 GMT.
A Reuters poll forecasts a 0.3percent monthly increase in August consumer prices and an increase in CPI of 2.9percent year-on-year, compared with 2.7 percent in July. “Signs of rising inflationary pressures may hit bets around the Fed cutting interest rates in October.
This could trigger a selloff that may drag gold back toward USD3,500. However, a soft CPI print may push gold toward fresh all-time highs,” Otunuga added. The Fed is widely anticipated to cut interest rates by 25 basis points at its meeting next Wednesday, while investors also priced in an 8percent chance of 50-basis-point reduction, according to CME FedWatch.
Lower interest rates typically support non-yielding gold. Elsewhere, spot silver was down 0.3percent at USD41.01 per ounce. Platinum fell 0.6percent to USD1,380.64 and palladium gained 0.7 percent to USD1,182.11.
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