Gold slips on firmer dollar and ahead of USA inflation data

Gold slips on firmer dollar and ahead of USA inflation data”

Money market traders stuck to bets that the Fed would raise interest rates three times this year after data released on Friday showed USA job growth recorded its biggest increase in more than 1-1/2 years in February.

The Labor Department said its consumer Price Index rose 0.2 percent last month after jumping 0.5 percent in January.

"If you have a higher than expected CPI reading today it would put more downward pressure on gold, especially if yields also go up", said Georgette Boele, commodity strategist at ABN AMRO in Amsterdam.

General Electric shares fell 1.9 percent after JPMorgan cut its price target on the stock to $11 from $14.

World stocks hit a two-week high on Monday after Friday's strong jobs data helped offset investors' concerns about the potential for a trade war between the United States and other major economies.

Gold prices held steady on Monday, as the USA dollar mildly weakened after broadly strengthening thanks to Friday's upbeat US nonfarm payrolls report.

Gold prices crept lower on Tuesday on a firmer dollar as investors waited for USA consumer price data due later in the day to gauge the outlook for inflation and the Federal Reserve's rate hike stance. Higher interest rates increase the opportunity cost for non-yielding bullion. While a March rate hike is on the cards, the Fed is likely to raise rates only three times in 2018. "We should expect interest rate uncertainty to weigh on prices over the short term".

Gold was up USD2 at USD1321 an ounce, having seen little movement over the past few sessions.

As for other precious metals, silver for May delivery fell 7.2 cents, or 0.43 percent, to settle at 16.536 dollars per ounce. "Despite recent gains, net speculative positions in silver are still only 18% of the record".

Platinum fell 0.4 percent, to $959.00 per ounce, the highest since September 8, while palladium remained unchanged at $978.50 per ounce.

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