Gold edges higher as markets await US inflation data
Gold rose on Monday, supported by a softer dollar and lower oil prices, as investors awaited key US inflation data this week for clues on the Federal Reserve's next policy move. Spot gold was up 0.3% at $4,206.01 per ounce as of 0253 GMT, after earlier hitting its highest level since October 2. US gold futures for December delivery gained 0.3% to $4,230.40.
Tim Waterer, chief market analyst at KCM Trade, said that softer oil prices on the back of Trump's reported energy ceasefire between Russia and Ukraine, combined with a more subdued dollar, had given gold a window of opportunity to the upside to start the week. He added that as oil eases it takes some of the immediate inflation and interest rate anxiety out of the market, which helps gold from a yield perspective.
US President Donald Trump made a surprise announcement on Sunday of an energy ceasefire between Russia and Ukraine, which he said was "effective immediately", although Ukrainian leader Volodymyr Zelenskiy said he was still waiting to see details of the deal. Oil prices fell on expectations of additional Russian supplies. The dollar was muted, making greenback-priced bullion more affordable for buyers holding other currencies.
Markets are now awaiting the US Consumer Price Index report on Wednesday, followed by the Producer Price Index and retail sales data on Thursday. Traders see a 17% chance of a rate hike in October and an 86% probability of an increase by December, according to CME's FedWatch tool. While gold is typically viewed as a hedge against inflation, higher interest rates tend to diminish the appeal of non-yielding bullion. US consumer sentiment slumped further in early October, as the rising cost of living amid the Middle East conflict soured households' views of the economy.
Among other metals, spot silver rose 0.5% to $61.12 per ounce, platinum gained 1% to $1,704.70 and palladium climbed 1.2% to $1,161.81.
