Gold Steadies Ahead of U.S. CPI With Taper Timeline in Focus

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(Bloomberg) — Gold steadied as investors waited for U.S. inflation data that may influence when the Federal Reserve will start reducing stimulus.

Consumer price index data due later Tuesday are expected to show an annual pace of inflation of 5% or more for a fourth month. This follows a report last week which showed the producer price index for final demand rose to a fresh series high as persistent supply chain disruptions pushed costs higher.

Bullion is trading below $1,800 an ounce as traders weigh risks from the delta virus variant and elevated inflation. If consumer prices come in hotter-than-expected, expectations for when the Fed could start tapering bond purchases could shift to November from December, according to Edward Moya, a senior market analyst at Oanda Corp.

“Gold prices are steadying as investors await the August inflation report, which could deliver some signs that inflation is transient,” Moya said in a note. “The delta variant shock to supply chains will likely show some positioning for an upside surprise” for the CPI data, which could send bullion lower, he said.

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Spot gold edged lower to $1,790.83 an ounce as of 8:43 a.m. in London, after rising 0.4% on Monday. The Bloomberg Dollar Spot Index edged 0.1% lower. Silver steadied, while platinum and palladium fell.

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