Gold inches higher as investors focus on US inflation data

Gold prices edged higher on Monday as investors look forward to U.S. inflation data after hawkish remarks from Federal Reserve Chair Jerome Powell pushed bullion to a more than three-week low last week.

FUNDAMENTALS

Spot gold was up 0.1% at $1,939.19 per ounce, as of 0102 GMT, after slipping to its lowest since Oct. 18 on Friday. U.S. gold futures gained 0.3% to $1,943.40.

Gold fell 2.8% last week to register its worst week in more than a month as Powell’s hawkish remarks pushed back any notion about interest rate cuts.

Higher interest rates raise the opportunity cost of holding gold.

U.S. consumer sentiment fell for a fourth straight month in November, and households’ expectations for inflation rose again, a survey showed on Friday.

Focus this week will be on U.S. consumer prices index (CPI) data due on Tuesday that could influence the Fed’s interest rate outlook.

Core CPI month-over-month is expected to have risen 0.3% in October, with a year-over-year increase of 4.1%, a Reuters poll showed. Both estimated gains are the same as in September.

The dollar was up 0.1% against its rivals after hitting a one-week high in the previous session, making bullion less attractive for other currency holders.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.10% to 868.14 tonnes on Friday from 867.28 tonnes on Thursday.

Gold demand improved in India last week due to a key festival, but early reports suggested purchases were slightly lower compared with last year as higher prices put off some customers.

Spot silver rose 0.3% to $22.68 per ounce, while platinum was flat at $859.66. Palladium gained 0.8% to $999.71 per ounce, but was holding near its lowest level since 2018.