Gold slips to three-week low; focus shifts to US inflation data

Dec 11 – Gold prices fell to a three-week low on Wednesday as the dollar and US Treasury yields firmed, while investors awaited several crucial central bank meetings and US inflation data that could influence the Federal Reserve’s policy path.

Spot gold was down 1.1% at USD 1,980.69 per ounce, as of 2:53 p.m. ET (1953 GMT), after hitting its lowest since Nov. 20. US gold futures settled about 1% lower at USD 1,993.70.

The dollar rose 0.1%, making gold more expensive for other currency holders. US 10-year Treasury yields also edged higher.

“Gold and silver traders are waiting for some new fundamental information that they’re going to get this week,” said Jim Wyckoff, senior analyst at Kitco Metals.

“Near-term chart posture for gold has deteriorated. If the CPI numbers are surprisingly high, that could produce some selling pressure on the gold market.”

Focus will be on the November US consumer price report due on Tuesday, before the Fed’s statement and Chair Jerome Powell’s comments on Wednesday.

Traders are pricing in a 71% chance of an interest rate cut in May, according to the CME FedWatch tool. Lower interest rates tend to support non-interest-bearing bullion.

Data on Friday showed US job growth accelerated in November.

“The resilience of the American labour market means that an earlier rate cut is unlikely … the prospect of higher-for-longer rates is back in a development that supports Treasury yields and the dollar, and is bad news for the non-yielding gold,” Ricardo Evangelista, senior analyst at ActivTrades said.

The European Central Bank, Bank of England, Norges Bank and the Swiss National Bank will also conduct policy meetings on Thursday.

Spot silver lost 0.6% to USD 22.83 per ounce, while platinum fell 0.3% to USD 911.64. Palladium rose 1.3% to USD 959.85 per ounce.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Shounak Dasgupta and Krishna Chandra Eluri)