Gold advances on softer dollar as traders await US inflation data
Timilehin Adejumobi
1 min read
Gold prices rose on Tuesday after falling over 1% in the previous session, as the dollar eased while investors awaited this week’s U.S. inflation data that could influence the Federal Reserve’s monetary policy trajectory.
Spot gold was up 0.4% at $1,997.69 per ounce, as of 0304 GMT. U.S. gold futures rose 0.4% to $2,012.30.
The dollar index was 0.1% lower, making bullion cheaper for overseas buyers.
Traders are now focussing on the U.S. consumer price data due Wednesday for more clarity on the path of rates heading into the Fed’s May policy meeting.
“A hotter-than-expected print may suggest that the Fed could still hike rates once more in May… gold’s rally higher has been somewhat excessive… chances of another Fed hike could kind of bring the overshoot down,” said OCBC FX strategist Christopher Wong.
A U.S. employment report released on Friday pointed to a tight labour market and raised bets of an interest rate hike by the U.S. central bank next month. Markets are pricing in a 71% chance of a 25 basis-point hike, according to the CME FedWatch tool.
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