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Gold dips ahead of key U.S. data

Reuters 

By Nithin ThomasPrasad

(Reuters) - Gold prices fell on Tuesday on a firmer dollar as investors waited for U.S. consumer price data due later in the day to gauge the outlook for inflation and the Federal Reserve's rate hike stance.

Spot gold was down 0.2 percent at $1,319.87 per ounce as of 0711 GMT, while U.S. gold futures for April delivery fell 0.1 percent to $1,320.00 an ounce.

The dollar index, which measures the U.S. Dollar against a basket of currencies, was up 0.12 percent at 90.004.

"Gold traders are adopting a more neutral stance ... While a March hike is fully priced in, traders usually get a bit anxious awaiting the Fed statement and key forward guidance," said Stephen Innes, at

"We should expect interest rate uncertainty to weigh on prices over the short term."

The is expected to release consumer price index (CPI) data at 1230 GMT, a key focus for the day. The median forecast by economists polled by points to annual core CPI inflation of 1.8 percent in February, which would be flat from January.

A higher reading could stoke expectations that the Federal Reserve will likely raise interest rates four times, rather than three times, this year. Higher interest rates increase the opportunity cost for non-yielding bullion.

Any outcome above expectations will put gold under pressure, said Richard Xu, a at HuaAn Gold, China's biggest gold exchange-traded fund.

In the longer term, Xu expected gold to be range bound this year, although an expected slowdown in the Chinese economy will provide support.

In February, growth in China's cooled to the weakest in over 1-1/2 years, raising concerns of a sharper-than-expected slowdown in the world's second biggest economy this year as regulators tighten the screws on financial risks.

Spot gold looks neutral in a range of $1,318-$1,327 per ounce and an escape could suggest a direction, according to Technical analyst,

In other precious metals, silver rose 0.1 percent to $16.50 per ounce.

fell 0.4 percent to $959.24 an ounce, while palladium edged 0.2 percent lower to $977.00 per ounce.

(Reporting by and in Bengaluru; Editing by and Subhranshu Sahu)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 16:06 IST
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