Gold prices inched up on Tuesday as the dollar pulled back, with investors bracing for U.S. inflation data to gauge its influence on the Federal Reserve’s policy path.
FUNDAMENTALS
Spot gold was up 0.1% at $1,856.01 per ounce, as of 0048 GMT, after falling to its lowest since early-January in the previous session. U.S. gold futures edged 0.1% higher to $1,865.60.
The dollar index slipped 0.1%, making greenback-priced gold less expensive for buyers holding other currencies.
Tuesday’s January U.S. consumer price index (CPI) data is expected to show the core CPI figure gaining 0.4% month-on-month.
The Fed will need to continue to raise interest rates in order to get them to a level high enough to bring inflation back down to the central bank’s target rate, Fed Governor Michelle Bowman said on Monday.
Rising rates dim bullion’s appeal as they increase the opportunity cost of holding the non-yielding asset.
Money markets expect the Fed’s target rate to peak at 5.195% in July, from a current range of 4.5% to 4.75%.
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