Contracts for gold edged back on Wednesday morning, with the precious metal flipping between small gains and losses, ahead of a report on U.S. consumer inflation that could influence trade on the session.
Commodity traders are watching for the consumer-price index, which is slated to be released by the Labor Department at 8:30 a.m. Eastern Time, and may show prices advancing over 7% year-over-year. Such a rise would mark the highest level in about 40 years and reinforce the view that inflation is running well above the Federal Reserve’s annual target of 2%.
Concerns about a spike in inflation, brought about partly by supply-chain bottlenecks and swings higher in demand, have helped to support prices of precious metals such as gold and silver in the near term.
February gold futures
fell $1.70, or less than 0.1%, to reach $1,816.90 an ounce, following a 1.1% gain on Tuesday, helping the most-active contract log the highest settlement since Jan. 5.
Gold also on Tuesday tallied a third consecutive finish in positive territory — the longest string of gains since a seven-session stretch ended Nov. 12.
Ricardo Evangelista, senior analyst at ActivTrades, in a daily note, said a high inflation “number is likely to support the dollar and therefore weigh down on the precious metal; however, should CPI numbers disappoint to the downside, then there will be scope for further gold gains.”
On Tuesday, gold prices retained gains after Fed Chairman Jerome Powell said the central bank’s plans to raise interest rates shouldn’t hurt economic expansion, essentially painting a picture of a “soft landing” rather than a recession.
Meanwhile, March silver
was trading 7 cents, or 0.3%, lower at $22.75 an ounce, after rising 1.6% in the previous session.