Gold prices fall slightly with spotlight on U.S. inflation data

Gold prices inch down on Monday, with cautious investors’ focus being on a key U.S. inflation reading.

As it could influence the size of the Federal Reserve’s next interest rate rise.

Spot gold edged down 0.2 percent at $1,712.69 per ounce, as of 0341 GMT.

U.S. gold futures dipped 0.3 percent at $1,723.20.

“There remains some lingering general de-leveraging downward pressure on gold, but this week’s inflation number may provide some relief,” chief economist at ACY Securities Clifford Bennett stated.

“A further indication that inflation may have peaked would be encouraging for the gold market. The Fed will continue to hike regardless, but that there may be some end in sight could be enough to tilt gold back up following recent sharp declines.”

The U.S. Consumer Price Index data, due on Tuesday, is expected to show that August prices inched up at an 8.1 percent pace over the year, compared with an 8.5 percent print for July.

In the meantime, European Central Bank policymakers find out that a heightened risk that they will have to rise their key interest rate to 2 percent, according to Reuters.

Spot gold is biased to break a resistance at $1,720 and rise towards $1,729, according to Reuters technical analyst Wang Tao.