Gold subdued as investors brace for US inflation print

Gold prices were subdued on Wednesday as investors remained cautious ahead of the U.S. consumer price inflation data that could provide more clarity on the Federal Reserve’s interest rate trajectory.

FUNDAMENTALS

* Spot gold eased 0.1% to $2,672.93 per ounce as of 0047 GMT. U.S. gold futures gained 0.3% to $2,689.60.

* Investors now await the Consumer Price Index (CPI) print due at 1330 GMT to gauge the Fed’s policy path. Any upside surprise could further close the door on future Fed easing.

* A Reuters poll forecast an annual rise of 2.9% versus November 2024’s 2.7% and a monthly increase of 0.3%.

* Gold extended gains on Tuesday after data showed Producer Price Index (PPI) rose 3.3% on an annual basis in December, slightly raising hopes that the Fed would continue on its rate-easing path this year and sending the U.S. dollar lower. * However, traders have fully priced in a rate-cut pause at the Fed’s policy meeting later this month. * With President-elect Donald Trump set to begin his second term next week, the focus remains on his policies that analysts expect will fuel inflation.

* Bullion is used as a hedge against inflation, although higher interest rates diminish its appeal.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.23% to 872.52 tonnes on Tuesday from 874.52 tonnes on Monday.

* According to Reuters technical analyst Wang Tao, spot gold may fall towards $2,635 per ounce.

* Spot silver shed 0.4% to $29.78 per ounce and palladium steadied at $938.23. Platinum added 0.3% to $937.66.