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U.S. CPI data due at 1230 GMT
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Fed's Jefferson: Economy slowing in "orderly" manner
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Spot gold may retrace $2,019-$2,024 range - technicals
(Adds graphic and updates prices throughout)
By Ashitha Shivaprasad
May 10 (Reuters) - Gold prices traded in a tight range
on Wednesday as traders braced for key U.S. inflation data that
could determine the Federal Reserve's next monetary policy
moves.
Spot gold was down 0.3% at $2,027.78 per ounce,
as of 0630 GMT, after being listless earlier in the session.
U.S. gold futures were down 0.4% at $2,035.00.
The U.S. consumer price index (CPI) data is due at 1230 GMT.
Economists polled by Reuters expect a 5.5% year-on-year increase
in core consumer prices for April.
If the U.S. inflation remains moderately controlled, it may
lead to a pause in Fed rate hikes, which will weaken the dollar
and support gold, said Hareesh V, the research head at Geojit
Financial Services. Markets are currently pricing in a 79% chance of the U.S.
central bank holding rates at their current level in June. On Tuesday, Fed Governor Philip Jefferson said the U.S.
economy is slowing in an "orderly fashion," while New York Fed
President John Williams said it is too soon to say whether the
central bank is done raising interest rates.
Although gold is considered a hedge against inflation,
rising interest rates dull non-yielding bullion's appeal.
The weak outlook for the U.S. currency and yields reignite
the safe-haven status of gold, Hareesh said.
"Worries over the global economy and demand-supply outlook may also support the commodity in the near future."
Investors are also closely watching the developments surrounding the U.S. debt ceiling.
President Joe Biden and top lawmakers agreed on Tuesday to further talks aimed at breaking a deadlock over raising the $31.4 trillion U.S. debt limit, with just three weeks before the country may be forced into an unprecedented default. According to Reuters technical analyst Wang Tao, spot gold may retrace the $2,019-$2,024 per ounce range.
Spot silver fell 0.3% to $25.54 per ounce, platinum edged 0.1% higher to $1,105.34, while palladium was flat at $1,570.35.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ xau ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)
