Gold firms as dollar eases ahead of U.S. inflation data

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Spot gold was up 0.4% at $1,883.95 an ounce, as of 0309 GMT. US gold futures were also up 0.4% at $1,886.50.

The dollar index fell 0.1%, while benchmark US 10-year Treasury yields also fell. A weaker dollar makes greenback-priced bullion more attractive to holders of other currencies. [USD/] [US/]

“Gold prices are very well supported as the dollar has weakened. However, on a technical front bullion is seeing some resistance around $1,880 levels and thus has been consolidating in a range since a few days,” said Ajay Kedia, director of Kedia Commodities, Mumbai.

Investors’ focus remains on US consumer price index data for December due at 1330 GMT.

If the inflation report is supportive for gold, then prices may move to the $1,900 level, but there may be some profit booking after that, Kedia added.

Boston Federal Reserve Bank President Susan Collins said she is inclined to raise interest rates by a quarter of a percentage point at the central bank’s next policy meeting, the New York Times reported. York Times on Wednesday.

The Fed had raised rates by 75 basis points (bps) four times last year, before slowing to a 50 bps hike in December.

Although gold is considered an inflation hedge, rising rates increase the opportunity cost of holding bullion.

On the physical front, Indian gold refiners have almost stopped imports of gold dore, a semi-pure alloy, as gray market operators offer steep discounts, industry officials said.

Spot silver gained 0.8% to $23.60, platinum rose 0.2% to $1,072.18 and palladium edged 0.1% higher to $1,775.34.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich)

By Ashitha Shivaprasad

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