Dubai: Gold prices rise as dollar drops
Investors wait for US inflation data for further direction.
Gold prices held steady on Wednesday morning, helped by a slight pullback in dollar, while investors awaited US inflation data to gauge the Federal Reserve's path on normalising policy.
Spot gold was little changed at $1,762.12 per ounce at 9.35 am UAE time, up by 0.09 per cent.
In the UAE, 24K rose Dh0.75 per gram to Dh213.5 on Wednesday morning. Among the other variants of the precious metal, 22K rose Dh0.50 to Dh200.5, 21K to Dh191.25 and 18K to Dh164.0, according to Dubai Gold and Jewellery Group data.
Naeem Aslam, chief market analyst at AVA Trade, said fears of rising US inflation have pushed the price of the precious metal up ahead of today's inflation report.
“The appetite for risky assets has waned, and because gold is regarded as a safe haven asset, investors are increasing their holdings of the yellow metal. However, with tapering on the horizon and the dollar strengthening, gold has failed to achieve significant gains,” he said.
The dollar index, which measures the greenback against six rivals, was down 0.2 per cent, easing off from an over one-year high hit on Tuesday.
"We're going to get US CPI data as well as those critical minutes from the September FOMC meeting so I think there is capacity there for gold to get a directional catalyst after this period of consolidation," DailyFX currency strategist Ilya Spivak said.
"If CPI registers hotter, then we are probably looking at expectations that the Fed could need to move faster in raising rates."
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