Gold prices were steady on Wednesday, May 15, as traders awaited U.S. inflation data, which could provide clues on the path of the U.S. Federal Reserve's interest rates.
Spot gold was steady at $2,357.35 an ounce by 0541 GMT, trading in a narrow $6 range after rising 1% on Tuesday.
U.S. gold futures rose 0.1% to $2,362.80 an ounce.
US consumer price index data is due at 1230 GMT. According to a Reuters poll, the data is expected to show core inflation in April rose 0.3% on a monthly basis, down from 0.4% in the previous month.
“Gold is very data-driven right now,” said Kyle Rodda, a market analyst at Capital.com. “If the CPI starts to come down a little bit, that would be positive for gold because it’s in a great position to take advantage of those moves given its resilience at this point.”
He continued, If the CPI comes out higher than expected, it will shake all markets and confidence in the possibility of lowering interest rates.
Gold is known to be a hedge against inflation but higher interest rates reduce the opportunity cost of holding the yellow metal.
US Federal Reserve Chairman Jerome Powell said on Tuesday that he expects inflation in the United States to continue to decline through 2024 and indicated that the central bank is unlikely to have to raise interest rates again.
However, data on Tuesday showed U.S. producer prices rose more than expected in April.
Among other metals, spot silver fell 0.1% to $28.57 an ounce, palladium gained 1.3% to $990.06 and platinum rose 2.2% to $1,053.75, its highest in nearly a year.
