By Seher Dareen
(Reuters) – Gold dipped on Wednesday, as an uptick in the dollar nudged prices off an over one-month high, while investors awaited the release of key U.S. inflation data.
Spot gold fell 0.4% to $1,705.84 per ounce by 02:29 p.m. ET (1929 GMT). U.S. gold futures settled 0.1% lower at $1,713.70.
Bullion prices hit their highest since Oct. 6 at $1,722.19 earlier in the session.
The U.S. consumer price index (CPI) report for October will provide the latest read on inflation in the United States in the wake of the Federal Reserve’s aggressive interest rate hikes.
“I’d be a little bit defensive on gold coming into tomorrow’s CPI data,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
Economists are expecting a deceleration in both the monthly and yearly core inflation to 0.5% and 6.5%, respectively.
Gold is highly sensitive to rising U.S. interest rates as they increase the opportunity cost of holding non-yielding bullion. [US/]
Higher rates also boost the dollar, pressuring the greenback-priced precious metal. The dollar index rose 0.9% on Wednesday. [USD/]
“With underlying physical demand (for gold) … the market still needs demand from investors in exchange-traded funds and speculators in futures to pick up,” Saxo Bank analyst Ole Hansen said in a note.
“For that to happen, the dollar and yields still need to send a clear signal they are rolling over.”
Meanwhile, Russia withdrew from the occupied Ukrainian city of Kherson, announcing one of the country’s most significant retreats.
Investors also eyed the outcome of a tightly contested U.S. midterm election which remained unclear.
Spot silver fell 1.2% to $21.08 per ounce after hitting a more than four-month peak in the previous session.
Platinum dropped 1.4% to $983.33, while palladium eased 3.4% to $1,856.38.
(Reporting by Seher Dareen and Bharat Govind Gautam in Bengaluru; Editing by Paul Simao and Maju Samuel)
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