Gold advances on softer dollar as traders await US inflation data

Washington, DC, April 11 (BNA): Gold prices rose on Tuesday after falling more than 1% in the previous session, as the dollar weakened while investors awaited US inflation data this week that could influence the path of the Federal Reserve’s monetary policy.

Spot gold was up 0.4%, at $1,997.69 an ounce, as of 0304 GMT. And US gold futures rose 0.4 percent to 2012.30 dollars.

The dollar index fell 0.1%, making bullion cheaper for overseas buyers.

Traders are now focusing on US consumer price data due on Wednesday for more clarity on the path of interest rates heading into the Federal Reserve’s monetary policy meeting in May, Reuters reports.

The US employment report released on Friday pointed to a tight labor market and raised bets on a rate hike by the US central bank next month. Markets put a 71% chance of a 25 basis point hike, according to CME FedWatch.

The opportunity cost of holding non-yielding bullion increases when interest rates are increased to reduce inflation.

Minutes of the Fed’s March 21-22 monetary policy meeting will also be examined on Wednesday.

New York Federal Reserve Bank President John Williams said on Monday that problems in the financial system that have prompted the central bank to extend large amounts of credit to banks were not collateral damage from the Fed’s aggressive efforts to reduce inflation.

Data on Tuesday showed that consumer inflation in March in China, the largest consumer of bullion, reached the slowest pace since September 2021, and indicated continued weak demand amid an unbalanced economic recovery.

Spot silver prices rose 0.2 percent to $24.94 an ounce, platinum increased 0.4 percent to $995.71, and palladium increased 1.4 percent to $1431.54.

WWA