Gold prices rise in anticipation of US inflation data

Gold prices eked out gains on December 23 ahead of a long holiday weekend as investors awaited US inflation data due later in the day that could offer some clues to the Federal Reserve rate-hike path, Report informs referring to Reuters.

Spot gold rose 0.3% to $1,797.98 per ounce by 09:54 GMT. US gold futures gained 0.6% to $1,805.90.

Gold prices are trading sideways around the $1,800 mark and “the willingness to take a big position on the bullish or bearish side around the holidays is also rather small,” said Quantitative Commodity Research analyst Peter Fertig.

However, investors are focusing on the personal consumption expenditures (PCE) data and indications of inflation moderating “would give the Fed one reason not to hike significantly more than they had already done,” Fertig added.

Spot silver rose 0.7% to $23.74 per ounce, platinum gained 2.2% to $998.75.

Palladium fell 0.9% to $1,665.75 and was headed for a second consecutive weekly fall.

09:50

Gold prices on December 23 morning rose, returning to above $1,800 per troy ounce, Report informs referring to the auction data.

The February gold futures price on the New York Comex rose $6.3, or 0.35%, to $1,801.6 a troy ounce. March silver futures rose 0.77% to $23.805 an ounce.

A day earlier, the price of gold fell 1.7% after the US Department of Commerce raised its estimate of final GDP growth last quarter to 3.2% yoy (if GDP grew at the same rate for four consecutive quarters). The number of initial applications for unemployment benefits in the country for the week to December 17 amounted to 216,000, which was lower than the forecast of 222,000.

Such macro statistics strengthened the expectations of tightening the monetary policy of the Federal Reserve System (FRS). According to CME Group, in February, the markets expect another increase in the discount rate, 69% of experts expect an increase by 0.25 percentage points, to 4.5-4.75% per annum, the rest predict an increase of 0.5 percentage points.

Tight monetary policy is positive for the exchange rate of the relevant national currency, in this case, the dollar, and the cost of debt in this currency, which in turn is negative for the price of gold as a safe-haven financial asset.