SINGAPORE: Gold prices edged lower in Asian trade on Wednesday, dragged down by higher US Treasury yields ahead of US consumer price data due later in the day, which is expected to show a sharp rise in annual inflation.
Spot gold was down 0.2% at $1,833.60 per ounce by 0858 GMT. US gold futures eased 0.1% to $1,833.70
The much-anticipated US consumer price data is forecast to show a 3.6% lift in year-on-year prices.
“If the inflation comes in stronger, that’s going to increase fears over a quicker than expected policy tightening from the Federal Reserve. That could cause yields to rise and increase the opportunity cost of holding gold,” said Fawad Razaqzada, market analyst with ThinkMarkets.
“Whereas, if the numbers come in weaker then we may see gold rise to $1,850, which is a key level of resistance from where we also have the 200-day moving average come into play.”
Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields have weighed on non-yielding bullion’s appeal this year.