Gold Prices Inch Lower as Focus Turns to US inflation Data

SEATTLE (Scrap Monster): Gold prices edged down on Tuesday, while investors awaited key U.S. inflation data that could offer clues on how soon the Federal Reserve can cut interest rates.

Spot gold fell 0.3% at $2,342.80 per ounce, as of 0732 GMT, after rising about 1% on Monday.

U.S. gold futures were up 0.4% at $2,343.80.

"A very strong dollar picture supported by a change in the U.S. monetary policy stance where the Fed starts looking for evidence to kick start interest rate hikes instead of easing could be a major risk as we could see a further corrective move in spot gold," said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.

However, in the short term, spot gold is still more skewed towards the positive side rather than the negative side and $2,310 is a key short-teThe core personal consumption expenditures price index (PCE), the Fed's preferred inflation measure, is due on Friday.rm support for this week, Wong added.

Fed meeting minutes released last week showed that the policy response, for now, would involve maintaining the benchmark policy rate at its current level but also reflected discussions of possible further hikes.

Traders are price in about 63% chance of rate cut by November, according to the CME FedWatch Tool.

Bullion is known as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding gold.

Spot gold may break the nearest resistance at $2,357 per ounce, and rise towards the $2,363-$2,373 range, Reuters technical analyst Wang Tao said.

Vietnam's central bank will stop auctioning gold in the domestic market and launch a new measure to stabilise domestic prices, it said on Monday.

Spot silver fell 0.8% to $31.42, platinum was down 0.7% at $1,047.20 and palladium lost 0.7% to $982.24.

Courtesy: www.reuters.com