Gold Subdued As Dollar Advances; Focus On U.S. CPI – Reuters

Dec 6 (Reuters) – Gold prices edged lower in choppy trade on Monday due to a firmer dollar and yields, while rising inflation and lingering uncertainty over the Omicron coronavirus variant capped losses as market focus turned to U.S. consumer prices data this week.

Spot gold fell 0.1% to $1,781.95 an ounce by 12:39 p.m. ET (1739 GMT), while U.S. gold futures steadied at$1,783.10.

The dollar strengthened, making gold more expensive for overseas buyers, while U.S. 10-year Treasury yields rebounded.

Global stock markets staged a tentative rebound from last week’s selloff driven by worries over the spread of Omicron.

“Gold is going to remain in a choppy trading environment as there is a push-pull in the market; one side we have market anticipating faster tapering and on the other, we have safe-haven demand at the idea of inflation running hot in the economy,” said David Meger, director of metals trading at High Ridge Futures.

Investors awaited consumer price data on Friday for cues on the U.S. Federal Reserve’s policy strategy. read more

A milder CPI reading, though unexpected, could reduce some of the focus on interest rate increases in 2022, while additional weakness in stock markets into December could also drive some safe-haven demand into gold, said Saxo Bank analyst Ole Hansen.

Interest rate hikes raise the opportunity cost of holding non-yielding bullion.

Spot silver fell 0.9% to $22.31 an ounce. Auto-catalyst metals, platinum rose 0.6% to $937.58, while palladium was up 1.6% to $1,838.66.

“Auto demand is forecast to recover in 2022 as vehicle production improves modestly on two consecutive weak years,” analysts at Heraeus precious metals wrote in a note.

“Palladium will benefit from higher loadings in China to meet stricter emissions standards, and platinum demand will be boosted by increasing use in heavy duty vehicles and some substitution of palladium in gasoline vehicles.”

Reporting by Ashitha Shivaprasad and Asha Sistla in Bengaluru; Editing by David Goodman, Louise Heavens, Marguerita Choy and Shailesh Kuber

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