Gold drifts upwards as dollar dips

FE Team | Published: December 13, 2023 00:23:20

Gold prices recovered from a three-week low hit the previous session, as a weaker dollar provided support on Tuesday ahead of US inflation data and major central bank policy meetings expected to yield clues on interest rates, reports Reuters.
Spot gold was up 0.4 per cent at $1,988.69 per ounce, as of 1211 GMT. US gold futures rose 0.5 per cent to $2,004.10.
The dollar edged 0.3 per cent lower against its rivals, making gold less expensive for other currency holders.
"The chances of gold rising in the near term once again above the $2,000 level depend on what happens today with the American inflation data," said Ricardo Evangelista, senior analyst at ActivTrades.
"Stronger than expected new jobs created last month in the US, it looks a bit ominous and it could be a precursor to a stronger than previously expected CPI data today... that would be bad news for gold," Evangelista added.
An upbeat US jobs report last week dampened expectations the Federal Reserve could cut interest rates as soon as March.
The US Consumer Price Index (CPI) report is due at 1330 GMT. Economists polled by Reuters expect U.S. headline inflation to be flat for November and core inflation to be steady at an annual pace of 4 per cent - well above the Fed's 2 per cent target.
The Federal Open Market Committee's two-day monetary policy meeting will end on Wednesday with its interest rate decision and the release of its summary economic projections.
The Fed is widely expected to leave rates unchanged at 5.25 per cent-5.50 per cent this week, with about 77 per cent chance of a rate cut in May, according to the CME FedWatch Tool.
Lower interest rates tend to support non-interest-bearing bullion.
Gold's trajectory could also be influenced by policy meetings of the European Central Bank and the Bank of England on Thursday.
Silver rose 0.7 per cent to $22.94 per ounce, while platinum gained 1.4 per cent to $922.34, and palladium climbed 2 per cent to $976.38 per ounce.