NEW YORK: Gold eked out gains on Wednesday after five sessions of losses, although an uptick in the dollar kept prices in check as investor focus turned to minutes from the US Federal Reserve’s last policy meeting.
Spot gold rose 0.4% to $1,666.40 per ounce by 1435 GMT, after falling to an over one-week low on Tuesday.
US gold futures slipped 0.4% to $1,678.40.
Data showed US producer prices (PPI) increased more than expected in September, suggesting inflation could remain uncomfortably high for a while.
Better-than-expected PPI data typically boosts gold, but with the Fed likely to stick to higher interest rates to try to fight inflation, bullion is slightly on the defensive, said Bob Haberkorn, senior market strategist at RJO Futures.
Following the data, the dollar index rose to hover near a two-week high, making gold less appealing for other currency holders. Benchmark US 10-year Treasury yields also edged higher.
Minutes from the Fed’s latest meeting are due at 1800 GMT on Wednesday, followed by US consumer price index data on Thursday, which is expected to remain stubbornly elevated.
“Gold will probably hang out in the range that it’s in until we see more information from the Fed because that’s what ultimately is going to be driving gold,” Haberkorn said.
The US central bank has raised interest rates aggressively since March to tame rising price pressures, which has weighed on gold’s appeal as higher rates increase the opportunity cost of holding non-yielding bullion.
“The outlook for gold will continue to be tied to expectations for further rate hikes from the Fed. Markets are forecasting interest rates will peak at 4.75%-5%, and that any rate cut is unlikely before May 2023,” said Carlo Alberto De Casa, external analyst for Kinesis Money, in a note.
Spot silver fell 0.7% to $19.06 per ounce, platinum dipped 0.1% to $884.73, and palladium fell 1.3% to $2,114.29.