By Rahul Paswan
– Gold prices edged higher on Wednesday on some bargain buying after the metal dropped to its lowest in nearly two months in the previous session and as the dollar paused ahead of upcoming U.S. inflation data and remarks from Federal Reserve officials.
Spot gold rose 0.4% to $2,607.59 per ounce by 1015 GMT, after hitting its lowest since Sept. 20 on Tuesday. U.S. gold futures rose 0.3% to $2,613.30.
The U.S. dollar index was down 0.1% after having climbed to its highest in more than six months against major currencies.
“Gold saw a significant decline after the elections and it’s now looking attractive again for medium-term gold bulls… they (Fed) are still on the path to cut rates, but remember also that they have already slowed from 50 bps to 25 bps,” said Quantitative Commodity Research analyst Peter Fertig.
The Fed cut interest rates by a quarter of a percentage point last week. Traders now see a 66% chance of a 25 basis points cut in the central bank’s December meeting, versus 77% a week ago, according to the CME’s FedWatch Tool.
Last week, bullion logged its steepest weekly decline in over five months, as markets absorbed the implications of Donald Trump’s victory and its potential impact on U.S. interest rate expectations. Lower rates boost the appeal of holding gold, which yields no interest.
The market focus has now shifted to the U.S. Consumer Price Index (CPI) data due at 1330 GMT. PPI, jobless claims, and retail sales are also due this week along with remarks from Fed Chair Jerome Powell and other U.S. central bank officials.
“It would not be surprising if the inflation data is not coming in as they expect and the unemployment rate remaining at a low level might mean that they (Fed) also make a pause in December,” Fertig said.
Spot silver rose 0.6% at $30.90, platinum fell 0.1% to $946.60 and palladium gained 0.3% to $947.61.
(Reporting by Rahul Paswan in Bengaluru; Editing by Shreya Biswas)
