(Reuters) – Gold prices were listless on Tuesday as investors held to the sidelines ahead of key U.S. inflation figures, which are likely to influence the Federal Reserve’s rate-hike narrative.
FUNDAMENTALS
* Spot gold was flat at $1,675.29 per ounce, as of 0034 GMT. Bullion prices hit a three-week peak in the previous session, buoyed by a weaker U.S. dollar.
* U.S. gold futures fell 0.2% to $1,677.30.
* The U.S. consumer price index report is due on Thursday. Traders now expect a 65% odds of a 50-basis-point rate hike at the Fed’s December meeting.
* Gold is considered a hedge against inflation, but rising interest rates increase the opportunity cost of holding non-yielding bullion.
* The European Central Bank must not stop raising interest rates until underlying inflation has clearly peaked, but it may slow the pace of hikes once rates hit a level that starts to restrict growth, France’s central bank chief told the Irish Times.
* Focus is also on the U.S. midterm elections, which will determine control of Congress and could spur moves all over the market.
* Spot silver was up 0.1% at $20.80. Platinum rose 0.1% to $980.09 and palladium also gained 0.1% to$1,898.22.
* Raising fears of a slowdown, China’s exports and imports unexpectedly contracted in October, as a perfect storm of COVID-19 curbs at home and global recession risks dented demand and further darkened the outlook for a struggling economy.
DATA/EVENTS (GMT)
0745 France Reserve Assets Total Oct
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sherry Jacob-Phillips)
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