Gold steady as dip‑buying offsets firm dollar, US inflation woes

Gold prices held steady on Thursday, paring ‌an earlier drop of nearly 1%, while a firmer dollar and fading hopes for near-term interest rate cuts due to higher oil prices continued to weigh.

Spot gold was down 0.1% at $5,172.86 per ​ounce as of 0221 GMT. U.S. gold futures for April delivery was ​unchanged at $5,178.

“Given a lack of a short-term exit for the Middle East ⁠conflict right now, plus a de facto closure of the Strait of Hormuz, ​I think any gold dips will likely be bid (buying opportunity), since the market lacks ​a clear reason to sell the metal,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.

The US dollar firmed 0.1%, making dollar-priced bullion more expensive for holders of other currencies.

Iran said ​the world should brace for $200-a-barrel oil after its forces struck merchant ships on Wednesday, while ​the International Energy Agency urged a massive release of strategic reserves to blunt one of the worst ‌oil ⁠shocks since the 1970s.

Oil prices jumped in early trade, adding to inflation pressures, as supplies from the Gulf remain constrained amid the US-Israeli war on Iran.

Iran has deployed about a dozen mines in the strait, according to sources, a move that could complicate ​efforts to reopen the ​narrow waterway, a ⁠key route for global oil and liquefied natural gas shipments.

Tankers in the strait have been stranded for more than a week, ​and producers haved suspended output as storage nears capacity.

In economic ​data, the ⁠US consumer price index rose 0.3% in February, matching forecasts and accelerating from January’s 0.2% increase.

CPI rose 2.4% in the year to February, also in line with expectations.

Investors ⁠are now ​awaiting the release of January’s delayed Personal Consumption ​Expenditures index on Friday.

Spot silver fell 0.3% to $85.49 per ounce. Spot platinum gained 0.1% to $2,171.19 and palladium rose ​0.8% to $1,650.52.