Gold Prices Rise Slightly on US Inflation Data

May 8 (Reuters) – Gold prices edged higher on Monday as the dollar eased, as investors awaited key U.S. inflation data due this week that could influence the stance of monetary policy of the Federal Reserve.

Spot gold rose 0.2% to $2,020.80 an ounce, at 0634 GMT. US gold futures also climbed 0.2% to $2,029.30.

The dollar index fell 0.1%, making bullion more attractive to overseas buyers.

Data from the US consumer price index (CPI) is due on Wednesday.

Any sign of slowing inflation would hamper the greenback as the Fed expects lower interest rates, which could see gold trend higher, said chief market analyst Tim Waterer. at KCM Trade.

Traders are also keeping an eye on developments surrounding the US banking sector and the US debt ceiling.

US Treasury Secretary Janet Yellen issued a stern warning on Sunday that a failure by Congress to act on the debt ceiling could trigger a “constitutional crisis”.

Gold would be among the “main beneficiaries” if there were further signs of weakness in the US economy and prices could hit $2,100 sooner rather than later, Waterer said.

Economic uncertainty and falling rates are attracting demand for zero return bullion.

“We are constructive on precious metals in May … We expect a trading range of $1,954 to $2,080 per ounce of gold (in May),” said Edward Meir, metals analyst at Marex in a note. .

On a physical level, China held 66.76 million troy ounces of gold at the end of April, compared to 66.50 million ounces at the end of March.

Spot silver rose 0.1% to $25.67 an ounce.

Platinum rose 0.5% to $1,064.03 and palladium gained 1.5% to $1,513.11.

“Platinum is regaining investor attention as fundamentals improve,” ANZ wrote in a note.

“South African mining challenges weigh on supply recovery this year, while demand is supported by gold as well as palladium substitution.”

Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sherry Jacob-Phillips

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