Gold ticks up, U.S. inflation data in focus

Gold prices nudged higher on Thursday, while traders await a key U.S. inflation data due later in the day to gauge the Federal Reserve’s future monetary policy stance.

Spot gold rose 0.2% to $2,614.00 per ounce by 0246 GMT, after easing for the previous six sessions. Prices scaled a record high last month.

U.S. gold futures gained 0.2% at $2,631.40.

The U.S. Consumer Price Index for September is due at 1230 GMT and Producer Price Index data on Friday.

“If core CPI comes hotter, U.S. Treasury yields will go higher and that is bad for gold. I think there is room for prices to come down, but don’t necessarily see a downtrend in the big picture,” said Ilya Spivak, head of global macro, Tastylive.

Markets see an 80% chance of a 25-basis-point Fed rate cut in November. 

A “substantial majority” of Fed officials at the September meeting supported beginning an era of easier monetary policy with an outsized half-point rate cut, but agreed that further easing will be data-driven, according to its minutes.

If there is a big geopolitical shock triggered by the situation in the Middle East and with the Fed in an easing cycle, there is still a chance for the bullion to scale another record this year, Spivak said.

The zero-yielding bullion is preferred in a low-interest rate environment as well as amid periods of economic and geopolitical turmoil.

San Francisco Fed Bank President Mary Daly said one or two more rate cuts this year are likely if the economy evolves as she expects. Dallas Fed Bank President Lorie Logan called for gradual cuts and said that the U.S. central bank should not rush.

Meanwhile, Israel’s plans to strike Iran added to concerns of rising tensions in the Middle East.

Spot silver rose 0.3% to $30.60, platinum added 1.4% to $958.60 and palladium firmed 1.3% to $1,052.61.

Source : cnbc