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Gold pauses as investors await U.S. inflation data

Kitco News

Dec 9 (Reuters) - Gold prices were listless on Thursday as investors held off making big bets ahead of U.S. inflation data this week, which is expected to set the tone for the Federal Reserve's strategy on interest rate hikes.

Spot gold was flat at $1,781.71 per ounce by 1011 GMT, while U.S. gold futures were down 0.1% to $1,783.40.

Gold has traded in the range of roughly $1,760 to $1,790 an ounce, after last month's fall below the key $1,800 mark, as investors attempted to gauge the pace at which the U.S. central bank would taper its stimulus.

Friday's U.S. Consumer Price Index (CPI) report will be followed by the Fed's policy meeting on Dec. 14-15.

If the Fed "enters tapering earlier than they announced at the last meeting, then of course the probability of rate hikes is increasing and that would be a negative factor (for gold)," said Quantitative Commodity Research analyst Peter Fertig.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising non-yielding bullion's opportunity cost.

The dollar index (.DXY) gained 0.2%, dimming gold's appeal for overseas buyers, while riskier assets got a fillip after BioNTech and Pfizer (PFE.N) reassured that a three-shot course of their COVID-19 vaccine can neutralise the Omicron variant. read more

"However, gold could see fresh bids if markets become fearful once more about pandemic-related developments or a ramp-up in geopolitical tensions between major economies," said Han Tan, chief market analyst at Exinity.

Gold's status as a safe-haven asset was also boosted by geopolitical worries.

In focus were the tensions over Russia and its stance on Ukraine, the diplomatic boycott of the Beijing Olympics by some Western nations and U.S. sanctions on Iran. read more

Spot silver fell 0.5% to $22.28 per ounce, platinum slipped 1.3% to $943.65 and palladium dipped 1% to $1,837.26.

Reporting by Asha Sistla and Nakul Iyer in Bengaluru; Editing by Amy Caren Daniel
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