Gold Rises.. Markets Await US Inflation Data

Gold prices rose yesterday, supported by a decline in the US dollar and oil prices, as investors awaited upcoming US inflation data this week in search of clues about the Federal Reserve’s future monetary policy path. Gold in spot transactions rose 0.3% to $4,206.01 per ounce during yesterday’s trading, after hitting its highest level since October 2 earlier in the session. US December gold futures also climbed 0.3% to $4,230.40 per ounce.

In currency markets, the dollar moved within a narrow range, making dollar-priced gold less expensive for holders of other currencies. Although gold is traditionally viewed as a hedge against inflation, higher interest rates typically reduce its appeal because it does not generate income for its holders.

Markets are awaiting the release of the US Consumer Price Index on Wednesday, followed by the Producer Price Index and retail sales data on Thursday, in search of indicators regarding the direction of monetary policy in the coming period.

In another sign of economic pressure, US consumer sentiment fell further in early October, as rising living costs linked to the conflict in the Middle East weighed on their outlook for the economy.

Gains extended to other precious metals. Silver in spot transactions rose 0.5% to $61.12 per ounce, platinum climbed 1% to $1,704.70, and palladium increased 1.2% to $1,161.81 per ounce.