The price of gold slipped against a backdrop of a rise in the US dollar on Thursday, as the investment community anticipated more indicators of the interest rate direction with the release of key US inflation statistics later this week.
Spot gold had fallen by 0.3 percent to US$4,082.95 per ounce at 9.44 am. US gold futures rose 0.8 percent to US$4,097.40 per ounce for December delivery.
The US dollar index increased 0.1 percent over its competitors, which means that gold had become expensive to other currency holders.
The report of the US Consumer Price Index (CPI), which was delayed and published on Friday due to the government shutdown, will tend to indicate that core inflation was maintained at 3.1 percent in September.
A 25-basis-point rate reduction during the meeting next week at the US Federal Reserve is almost completely priced in by investors. When interest rates are low, gold will tend to appreciate because it decreases the opportunity cost of holding non-yielding bullion.
The US President Donald Trump mentioned on Wednesday that he anticipated a trade agreement with Chinese President Xi Jinping and that he would discuss the issue of Chinese purchases of Russian oil in a meeting with this leader in South Korea next week.
Russia indicated on Wednesday that it was still in the process of preparing to hold a possible summit between President Vladimir Putin and Trump.
The gold price has increased by approximately 56 percent this year, and on Monday, it was at a record high of US$4,381.21, aided by geopolitical and economic uncertainty, rate-cut bets, and central bank buying.
World’s largest gold-based exchange-traded fund, the SPDR Gold Trust, reported a decline of 0.59 percent in its holdings to 1,052.37 tonnes on Wednesday as compared to 1,058.66 tonnes on Tuesday.
However, the spot silver dropped by 0.4 per cent to US$48.31 per ounce, platinum declined by 1.4 per cent to US$1,598.65, and palladium dropped by 1.4 per cent to US$1,438.47.
