By Anjana Anil
(Reuters) – Gold prices recovered from a three-week low hit the previous session, as a weaker dollar provided support on Tuesday ahead of U.S. inflation data and major central bank policy meetings expected to yield clues on interest rates.
Spot gold was up 0.4% at $1,988.69 per ounce, as of 1211 GMT. U.S. gold futures rose 0.5% to $2,004.10.
The dollar edged 0.3% lower against its rivals, making gold less expensive for other currency holders. [USD/]
“The chances of gold rising in the near term once again above the $2,000 level depend on what happens today with the American inflation data,” said Ricardo Evangelista, senior analyst at ActivTrades.
“Stronger than expected new jobs created last month in the U.S., it looks a bit ominous and it could be a precursor to a stronger than previously expected CPI data today… that would be bad news for gold,” Evangelista added.
An upbeat U.S. jobs report last week dampened expectations the Federal Reserve could cut interest rates as soon as March.
The U.S. Consumer Price Index (CPI) report is due at 1330 GMT. Economists polled by Reuters expect U.S. headline inflation to be flat for November and core inflation to be steady at an annual pace of 4% – well above the Fed’s 2% target.
The Federal Open Market Committee’s two-day monetary policy meeting will end on Wednesday with its interest rate decision and the release of its summary economic projections.
The Fed is widely expected to leave rates unchanged at 5.25%-5.50% this week, with about 77% chance of a rate cut in May, according to the CME FedWatch Tool.
Lower interest rates tend to support non-interest-bearing bullion.
Gold’s trajectory could also be influenced by policy meetings of the European Central Bank and the Bank of England on Thursday.
Silver rose 0.7% to $22.94 per ounce, while platinum gained 1.4% to $922.34, and palladium climbed 2% to $976.38 per ounce.
(Reporting by Anjana Anil in Bengaluru; Editing by Shailesh Kuber and Barbara Lewis)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.
Source: The Print
