NEW YORK: Gold prices edged higher on Tuesday as some investors sought cover from economic uncertainty including the debt ceiling deadlock in Washington, while also positioning for the US inflation print for cues on the trajectory of interest rates.
Spot gold was up 0.2% at $2,025.00 per ounce by 11:20 a.m. EDT (1520 GMT), while US gold futures were little changed at $2,032.20.
Equities markets dipped as traders were kept on edge by weak Chinese trade data and the impasse over the US debt ceiling.
“It’s going to be a risk-off day” as markets await US consumer price index data on Wednesday, said Phillip Streible, chief market strategist at Blue Line Futures, in Chicago.
Hotter-than-expected CPI data would bolster the likelihood of further rate hikes, but much weaker data could cause “a big rush into commodities across the board and further liquidation in the dollar”, Streible added.
While gold is considered a hedge against inflation, rising interest rates dull non-yielding bullion’s appeal.
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