By Ishaan Arora
(Reuters) – Gold dipped on Thursday, but held near record-highs above the $3,600 mark, as a modest recovery in the dollar and profit-taking pressured prices, while investors waited for U.S. consumer inflation figures due later today.
Spot gold was down 0.5% at $3,621.19 per ounce, as of 1016 GMT. Bullion hit a record high of $3,673.95 on Tuesday. U.S. gold futures for December delivery fell 0.6% to $3,659.70.
The U.S. dollar index rose 0.2% to a near one-week high against rivals, making greenback-priced gold more expensive for overseas buyers. [USD/]
“Gold seems to be slightly pressured by a stabilizing dollar and profit-taking today. Nevertheless, the precious metal remains firmly bullish above the psychological $3,600 level with yesterday’s surprise drop in U.S. producer prices limiting the downside,” said Lukman Otunuga, senior research analyst at FXTM.
U.S. producer prices unexpectedly fell in August due to lower trade services margins and modest increases in goods costs, data released on Thursday showed.
Weaker-than-expected nonfarm payroll data last week, along with revised estimates revealing 911,000 fewer jobs in the 12 months through March, have reinforced expectations of monetary easing.
Investors now await weekly jobless claims and U.S. CPI data, due at 1230 GMT. A Reuters poll forecasts a 0.3% monthly increase in August consumer prices and an increase in CPI of 2.9% year-on-year, compared with 2.7% in July.
“Signs of rising inflationary pressures may hit bets around the Fed cutting interest rates in October. This could trigger a selloff that may drag gold back toward $3,500. However, a soft CPI print may push gold toward fresh all-time highs,” Otunuga added.
The Fed is widely anticipated to cut interest rates by 25 basis points at its meeting next Wednesday, while investors also priced in an 8% chance of 50-basis-point reduction, according to CME FedWatch.
Lower interest rates typically support non-yielding gold.
Elsewhere, spot silver was down 0.3% at $41.01 per ounce. Platinum fell 0.6% to $1,380.64 and palladium gained 0.7% to $1,182.11.
(Reporting by Ishaan Arora in Bengaluru; Editing by Louise Heavens)
