Gold prices rise; US inflation print and Fed rate decision in focus

June 13 (Reuters) – Gold priced edged up on Tuesday as the dollar softened, although prices moved in a tight range as traders awaited US inflation data and the Federal Reserve’s highly-anticipated policy decision.

Spot gold was up 0.3% to USD 1,961.79 per ounce by 0649 GMT. US gold futures GC advanced 0.3% to USD 1,975.90.

The US dollar dipped 0.3%, making greenback-priced bullion more appealing to overseas buyers.

“The market is waiting for the US Consumer Price Index (CPI) and Federal Reserve Monetary Policy Committee (FOMC) meeting to provide a clearer direction on gold price. (However) there is a lack of catalyst for gold to outperform other asset classes regardless of US Fed policy decision making,” said Michael Langford, director at corporate advisory firm AirGuide.

The May CPI is expected to show a slowing rise in inflation on a year-over-year basis to 4.1% from the April reading of 4.9%, according to economists polled by Reuters, with a monthly increase of 0.2%, down from a 0.4% rise the prior month.

While gold is seen as a hedge against inflation, higher rates to tame price pressures generally weigh on the non-yielding asset’s appeal.

Traders are pricing in a 75.8% chance of the Fed keeping rates on hold, and a 24.2% chance of a 25-basis-point rate hike, according to the CME FedWatch tool.

“Physical offtake for gold is easing in (top bullion consumer) China due to slowing economic growth and the lean demand season,” ANZ said in a note.

The People’s Bank of China lowered a short-term lending rate to help the economy through its shaky post-pandemic recovery.

Spot silver rose 0.4% to USD 24.152 per ounce, platinum edged 0.3% higher to USD 993.39, and palladium added 0.8% to USD 1,360.85.

ANZ expects platinum prices to move towards USD 1,150/oz and palladium to hover near USD 1,420/oz by the end of this year.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips, Sohini Goswami and Rashmi Aich)