Gold extends gains on U.S. inflation data, focus on cenbank meetings

Reuters2021-12-13

Dec 13 (Reuters) - Gold inched higher on Monday as elevated U.S. consumer prices lifted its appeal as an inflation hedge, while investors awaited a flurry of central bank meetings this week, including by the U.S. Federal Reserve, for further direction.

FUNDAMENTALS

Spot gold rose 0.2% to $1,786.51 per ounce by 0213 GMT, after Friday's 0.8% gain. U.S. gold futures were up 0.2% to $1,787.70.

U.S. consumer prices increased further in November as the cost of goods and services rose broadly amid supply constraints, leading to the largest annual gain since 1982.

The dollar index was quiet at the start of a week in which central bank meetings will likely drive currency markets.

The Fed is widely expected to signal a faster tapering of asset buying this week, and thus an earlier start to rate hikes.

The European Central Bank and the Bank of Japan are set to review their monetary policies this week.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of holding bullion, which bears no interest.

The European Central Bank is set to halve the amount of assets it buys each month from April, according to a Reuters poll.

Top Asian hubs saw healthy demand for physical gold last week as domestic prices retreated into the year-end, although volatility in rates deterred retail buyers and jewellers in India.

Spot silver rose 0.4% to $22.26 an ounce.

Platinum was flat at $942.00 and palladium gained 1.4% to $1,786.54.

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