Gold Holds Drop as Inflation Data Douse Hopes for Big Fed Cut
Gold steadied after a small decline following a report that showed underlying US inflation picked up in August, weakening expectations for an outsized interest-rate cut by the Federal Reserve next week.
Bullion traded near $2,512 an ounce, after easing 0.2% on Wednesday as data showed the core consumer price index climbed 0.3% from July, and 3.2% from a year ago. Two-year Treasury yields rose on speculation the Fed will move gradually with cuts as traders cemented wagers on a quarter-point reduction. Lower borrowing costs typically benefit the non-interest yielding metal.
Bullion has risen by more than a fifth this year, with recent strength underpinned by growing expectations that the Fed will soon embark on a cutting cycle. Strong central-bank buying, and robust demand in the over-the-counter market, have also helped the precious metal's rally.
Spot gold was flat at $2,512.40 at 7:53 a.m. in Singapore, after peaking at a record $2,531.75 in August. The Bloomberg Dollar Spot Index was steady. Silver was little changed, while platinum and palladium edged higher.
Source : Bloomberg
