Gold eases on firm dollar; spotlight on US inflation data

Gold prices eased on Tuesday ​as the US dollar held firm, while markets focused on upcoming ‌US inflation prints for fresh signals on the Federal Reserve’s interest-rate trajectory.

Spot gold fell 0.2% to $4,164.45 per ounce by 0201 GMT after hitting a one-week peak on Monday.

US ​gold futures for December delivery fell 0.1% at $4,187.90.

The US dollar lingered ​near an 18-month high scaled in the previous session, making dollar-denominated ⁠metals more expensive for holders of other currencies.

The Consumer Price Index (CPI) is ​due on Wednesday, and the Producer Price Index (PPI) report is scheduled for Thursday.

“US ​CPI data will be critical for gold in the short-term,” said Kyle Rodda.

If inflation comes in hotter than expected, particularly on the core ​measure, and prompts even a modest increase in expectations of an October ​rate hike, it could result in another dip in gold, he added.

When interest rates are ‌elevated, ⁠investors typically gravitate toward yield-bearing assets rather than gold.

Currently, traders see only a 21% chance of a Fed rate hike this month but are pricing in an 88% chance of a December increase, according to CME’s FedWatch ​tool.

Cleveland Fed President Beth Hammack ​said the US ⁠central bank should move “relatively quickly” to a more restrictive monetary policy stance to control inflation, which she feels has ​become broader-based and is starting to influence firms’ price-setting ​plans.

On the ⁠geopolitical front, Saudi Arabia said it was facing a new barrage of incoming fire and that Riyadh airport would remain shut for now, days after Saturday’s deadly ⁠missile ​strike on a departure terminal that was claimed ​by Yemen’s Iran-allied Houthis.

Among other metals, spot silver eased 0.5% to $60.01, platinum fell 0.2% to $1,682.47, and ​palladium fell 0.5% to $1,137.69.