Gold Steadies as Oil Prices Soar, US Inflation Data Looms
Gold prices were steady on Tuesday as investors await key US inflation data, despite concerns over rising oil costs that may have reignited inflation fears. Spot gold was trading at $4,400.66 per ounce by 1148 GMT.
The precious metal's value is under pressure due to higher interest rate bets and a softer dollar, according to Nikos Tzabouras, a senior market analyst at Jefferies-owned Tradu.com.
Oil prices have extended gains to multi-week highs following the Yemeni attack on energy facilities in Saudi Arabia. Gold's appeal is diminished by higher interest rates, which tend to make non-yielding bullion less attractive.
Investors are now pricing in a 61% chance of an interest rate hike at the central bank's policy meeting, up from about 50% before the data. They await US producer price index data on Thursday and the consumer price index data on Friday for further clues on the Fed's monetary policy stance.