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Gold Rises On Softer Dollar Ahead Of U.S. Inflation Data

Kitco News

Feb 14 (Reuters) - Gold prices rose for a third straight session on Wednesday to hit a one-week high, buoyed by a weaker dollar, while investors awaited U.S. inflation data for clues on the pace of future U.S. interest rate increases.

FUNDAMENTALS

* Spot gold was up 0.3 percent at $1,332 an ounce, as of 0115 GMT, after touching its highest level since Feb. 6 at $1,333.76.

* U.S. gold futures rose 0.4 percent to $1,335 per ounce.

* The dollar was down against a basket of currencies at 89.722, having shed 0.6 percent overnight.

* A retreat in the dollar, in which bullion is priced, has helped gold pull back nearly 2 percent from last week's one-month low of $1,306.81 an ounce.

* Asian shares were set for a tense session on Wednesday as investors await readings on U.S. inflation that could fan fears of faster rate hikes and unleash another burst of global volatility.

* U.S. inflation data for January is due on Wednesday and the U.S. Federal Reserve next meets on March 20-21.

* British inflation unexpectedly held close to its highest level in nearly six years in January, highlighting the challenge facing the Bank of England and reinforcing expectations of a rise in interest rates in May.

* Economic growth in the U.S., Europe and Asia has stoked inflation fears in recent weeks, pushing up bond yields and undermining stock prices, and Wednesday's U.S. inflation data may help determine whether the correction in equities markets is over.

* Inflation is sometimes regarded as gold-positive, because bullion is seen as a safe haven when price pressures are rising, but expectations that the U.S. Federal Reserve will lift interest rates to fight inflation make the non-yielding metal less attractive.

* Robust consumer spending drove Japan's economy to eight straight quarters of growth in October-December, its longest continuous expansion since the 1980s bubble economy.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.36 percent to 823.66 tonnes on Tuesday from 820.71 tonnes on Monday.

* Russia produced 306.9 tonnes of gold in 2017, up from 288.5 tonnes in 2016, the finance ministry said on Tuesday.

* South African miner Harmony Gold's half-year profit rose 49 percent, boosted by improved performance at its South African operations, the firm said on Tuesday.

* Gold trader Regal RA DMCC has become the first company in the Middle East to be awarded a licence by the Dubai Multi Commodities Centre (DMCC) to trade in cryptocurrencies.

DATA AHEAD (In GMT)

0700 Germany GDP flash estimate Q4

1000 Euro zone GDP flash estimate Q4

1000 Euro zone Industrial production Dec

1330 U.S. Consumer prices Jan

1330 U.S. Retail sales Jan

1500 U.S. Business inventories Dec

(Reporting by Eileen Soreng in Bengaluru; Editing by Amrutha Gayathri)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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