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Gold steady near 1-week high as inflation risks lift demand

Reuters2022-02-08

Feb 8 (Reuters) - Gold prices were steady on Tuesday as inflationary pressures kept the safe-haven metal supported near previous session's one-week high, while market participants awaited U.S. inflation data that is crucial for the Federal Reserve's tapering timeline.

FUNDAMENTALS

Spot gold was steady at $1,821.26 per ounce, as of 0052 GMT, hovering close to Monday's high of 1,823.21. U.S. gold futures were flat at $1,821.30.

The dollar was unchanged, while benchmark 10-year U.S. Treasuries were steady near their highest levels since December 2019 scaled in the previous session.

U.S. inflation data for January is due on Thursday, with markets now pricing in a one-in-three chance the U.S. Fed might hike rates by a full 50 basis points in March.

Gold is considered a hedge against inflation and geopolitical risks, yet rate hikes would raise the opportunity cost of holding non-yielding bullion.

There is no need for big monetary policy tightening in the euro zone as inflation is set to fall back and could stabilise at about 2%, European Central Bank President Christine Lagarde said on Monday, adding that high energy prices, the biggest driver of inflation, were likely to eat into household purchasing power.

Oil prices settled lower on Monday on faint signs of progress in nuclear talks between the United States and Iran, which could lead to the removal of U.S. sanctions on Iranian oil sales.

The coming days will be crucial in the Ukraine standoff, French President Emmanuel Macron said after a meeting with Russia's Vladimir Putin, who suggested some progress had been made in the talks.

Silver rose 0.1% to $23.01 per ounce, platinum was steady at $1,020.06, and palladium rose 0.2% to $2,266.79.

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Comment5

  • RS142
    ·2022-02-08
    Good
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  • Daviistoh
    ·2022-02-08
    Good 
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  • MT15NKCB
    ·2022-02-08
    Gold to hit US$2000 this year?
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  • Jawslea
    ·2022-02-08
    U.S. inflation data for January is due on Thursday, with markets now pricing in a one-in-three chance the U.S. Fed might hike rates by a full 50 basis points in March.
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    • EricVaughan
      I think the possibility of the Fed raising interest rates will be relatively high, and the current economic situation is not optimistic.
      2022-02-09
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    • DaisyMoore
      The recent stock price performance is not very good. The negative sentiment and panic in the market have been vented. The announcement of the news may have less impact on the market.
      2022-02-09
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    • ElsieDewey
      50bps! This is a relatively large adjustment. I think the news released by the Federal Reserve will directly affect the market this year. We need to wait!
      2022-02-09
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    View more 2 comments
  • AhKeong
    ·2022-02-08
    Inflation is a blame word 
    Reply
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