Gold eases as dollar firms, focus on US inflation data

[BEIJING] Gold prices edged lower on Thursday (Oct 23), weighed down by an uptick in the US dollar as investor looked forward to key US inflation data due later this week for more cues on the interest rate path.

Spot gold was down 0.3 per cent at US$4,082.95 per ounce, as at 9.44 am.

US gold futures for December delivery climbed 0.8 per cent to US$4,097.40 per ounce.

The US dollar index rose 0.1 per cent against its rivals, making gold more expensive for other currency holders.

The US Consumer Price Index (CPI) report, due on Friday after a delay due to the government shutdown, is expected to show that core inflation held at 3.1 per cent in September.

Investors have nearly fully priced in a 25-basis-point rate cut at the US Federal Reserve’s meeting next week.

Gold tends to appreciate when interest rates are low as they reduce the opportunity cost of holding non-yielding bullion.

US President Donald Trump said on Wednesday he expected to reach a trade agreement with Chinese President Xi Jinping and that he would raise concerns about China’s purchases of Russian oil during their meeting in South Korea next week.

Russia said on Wednesday that it was still preparing for a potential summit between President Vladimir Putin and Trump.

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Gold prices have gained about 56 per cent this year, reaching an all-time peak of US$4,381.21 on Monday, bolstered by geopolitical and economic uncertainties, rate-cut bets and sustained central bank buying.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.59 per cent to 1,052.37 tonnes on Wednesday from 1,058.66 tonnes on Tuesday.

Elsewhere, spot silver fell 0.4 per cent to US$48.31 per ounce, platinum slipped 1.4 per cent to US$1,598.65 and palladium lost 1.4 per cent to US$1,438.47. REUTERS