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US CPI data due at 1230 GMT
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Gold remains well supported until $1,970 - analyst
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Platinum, palladium rise
(Updates prices throughout)
By Arundhati Sarkar
May 10 (Reuters) - Gold prices eased on Wednesday, after
rising in the previous two sessions, as the dollar firmed and
investors positioned for April U.S. inflation data, which could
have a bearing on the Federal Reserve's interest rate policy.
Spot gold was down 0.3% at $2,029.09 per ounce by
1151 GMT, while U.S. gold futures lost 0.3% at $2,037.30.
The U.S. dollar ticked up 0.1%, limiting appetite for gold,
especially among overseas investors. 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.
But if inflation comes in at the expected levels, a
significant impact on gold prices is not expected, said
ActivTrades senior analyst Ricardo Evangelista, attributing
gold's slight losses resulting from investors "hedging up" the
dollar.
Fed Chair Jerome Powell has said it is now an open question
whether further rate increases will be warranted in an economy
still facing high inflation, but also showing signs of a
slowdown.
While gold is considered a hedge against inflation, rising
interest rates dull non-yielding bullion's appeal.
However, some analysts have said gold could attempt another
run to record high levels, given persistent economic worries,
including U.S. debt ceiling jitters.
Concerns about a potential U.S. debt ceiling default are
keeping investors from taking on higher risk, and so gold
remains well supported for the time being down to $1,970, while
resistance may arise around $2,066-$2,076, Daniela Hathorn, a
senior market analyst at Capital.com, said.
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.
Elsewhere, spot silver fell 0.4% to $25.51 per ounce,
while platinum rose 0.4% to $1,108.77.
Palladium gained 1.2% to $1,588.66.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Varun H
K, Mark Potter and Shilpi Majumdar)
