BENGALURU- Gold prices edged up on Wednesday as investors hunted for bargains after steep declines in the previous session, while spotlight shifted to US inflation print, which could shed more light on the Federal Reserve’s monetary policy path.
Spot gold rose 0.4 percent at $2,608.18 per ounce after hitting its lowest since Sept. 20 on Tuesday. US gold futures was up 0.3 percent at $2,614.10.
“There is currently some bargain hunting going on as prices fell below the $2,600 mark. Recent sessions saw gold negatively impacted due to a stronger dollar, driven by expectations of inflationary Trump policies affecting the rate cut cycle,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
Traders see a 60.3 percent chance of a 25-basis-point cut at Fed’s December meeting, down from 77.3 percent a week ago, according to CME’s FedWatch Tool.
Gold is used as a hedge against inflation but higher rates dampen its appeal as it yields no interest.
Market focus is on US Consumer Price Index (CPI) data due at 1330 GMT. Other data sets due this week include Producer Price Index (PPI), weekly jobless claims on Thursday and Friday’s retail sales data.
“If the CPI and PPI numbers show that inflation trend is still pretty much contained, then gold could make a move up towards $2,650,” added Wong.