Gold Steadies as Traders Watch US Inflation for Rate-Hike Clues

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Or sign-in if you have an account.gb1wcy7a6[0m8h(dgbsi[ob5_media_dl_1.png Bloomberg(Bloomberg) — Gold steadied, as traders weighed prospects for a deal to reopen the Strait of Hormuz while awaiting US inflation data that could provide fresh clues to the Federal Reserve’s interest-rate path.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountBullion was near $4,370 an ounce in early trading, after pulling back from a two-month high on Tuesday to end the session down 0.5%. Pakistan’s defense minister said the US and Iran are “close to some sort of arrangement” to reopen Hormuz, even after both sides appeared to toughen their stances on the waterway that’s crucial to global energy flows.A rebound in oil prices as deadlock persists in the Middle East has clouded the outlook on the Fed’s appetite for a rate hike, with traders holding back from large bets ahead of the inflation report due later Wednesday. Interest-rate swaps show traders see the odds of a quarter-point increase next month as virtually a coin toss.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe closely watched consumer price index is seen rising 0.1% in July following a 0.4% decline in the prior month, according to the median projection in a Bloomberg survey of economists. In the wake of Friday’s weak jobs report, a moderation in price growth may help alleviate some of the inflation anxiety at the Fed.However, momentum for a more aggressive monetary policy — typically a negative for gold, which doesn’t pay interest — will build if higher energy prices exert more inflationary pressure. Oil held a four-day gain on Wednesday.“The macro backdrop has turned more supportive, but remains fragile,” Ole Hansen, head of commodity strategy at Saxo Bank AS, said in a note. “A softer dollar and reduced expectations for additional Fed tightening have helped precious metals, but renewed inflation pressure, another oil-price surge or stronger US data could quickly revive rate-hike expectations,” he said.Gold has rallied above the $4,000-an-ounce support threshold in recent weeks, with renewed investor appetite for the precious metal backed by an increase in central bank purchases, notably from China. Bullion traded above the 100-day moving average earlier this week before its retreat on Tuesday.“Gold has defended the downside but has yet to confirm a renewed bull-market advance,” Hansen said. “Support around $4,200 is increasingly important, while the major upside test is once again focusing on the 200-day moving average, currently sitting just below $4,500.”Spot gold edged down 0.1% to $4,367.56 an ounce at 7:33 a.m. in Singapore. Silver rose 0.1% to $64.72 an ounce. Platinum and palladium were little changed. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat after ending the previous session down 0.1%.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.