GOLD prices remained stable on Tuesday (Sep 10) as market participants focused on August inflation figures for hints about a likely reduction in Federal Reserve interest rates this month.
Spot gold was flat at US$2,504.98 per ounce, as at 0027 GMT. US gold futures edged 0.1 per cent higher to US$2,533.70.
Trader attention on Wednesday will turn towards the US Consumer Price Index (CPI) data, which is expected to show underlying inflation remains on its meandering path back down towards the central bank’s 2 per cent goal, and the Producer Price Index (PPI) reading on Thursday.
According to a report from the New York Federal Reserve released on Monday, the US public’s expectations for inflation remained stable last month, even as current price pressures continued to ease.
Traders of Fed funds futures are now pricing a 70 per cent chance of a 25-basis-point (bp) cut at the Fed’s Sep 17 to 18 meeting, and a 30 per cent chance of a 50 bp reduction, according to the CME FedWatch Tool.
Lower interest rates reduce the opportunity cost of holding a zero-yield bullion.
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Last week, a report showed US employment increased less than expected in August, but a drop in the jobless rate to 4.2 per cent suggested the labour market was not falling off a cliff to warrant a half-point cut.
Data on Monday showed that US wholesale inventories increased less than initially thought in July amid a sharp rebound in sales, casting doubt on whether inventory investment would contribute to economic growth in the third quarter.
Spot silver fell 0.2 per cent to US$28.29 per ounce, platinum gained 0.4 per cent to US$941.25 and palladium was slightly up by 0.1 per cent at US$945.75.
In company news, Anglo American hired financial advisers to sell two nickel mines in Brazil, the miner’s country head, Ana Sanches, told journalists on Monday. REUTERS
