Investing.com - Gold futures edged lower on Tuesday, after data showed that consumer price inflation in the U.S. rose less-than-expected in August.
Prices also came under pressure amid expectations the Federal Reserve will start tapering its USD85-billion-a-month bond-buying program at the conclusion of its two-day policy meeting on Wednesday.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,315.20 a troy ounce during U.S. morning hours, down 0.2%. The December contract ended 0.7% higher on Monday to settle at USD1,317.80 a troy ounce.
Gold prices traded in a range between USD1,306.40 a troy ounce, the daily low and a session high of USD1,323.40 a troy ounce.
Gold futures were likely to find short-term support at USD1,303.20 a troy ounce, Monday’s low and the weakest level since August 8 and resistance at USD1,365.70, the high from September 12.
The U.S. Department of Labor said earlier that consumer prices rose by a seasonally adjusted 0.1% in August, below forecasts for a 0.2% increase, after rising by 0.2% in July.
Year-over-year, consumer prices rose at an annualized rate of 1.5% last month, compared to expectations for a 1.6% gain and slowing from 2% in July.
Consumer prices, excluding food and energy costs, inched up 0.1% in August, meeting forecasts. Core consumer prices rose 0.2% in July.
Core CPI increased at annualized rate of 1.8% last month, in line with estimates and up from 1.7% in July.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories.
The central bank usually tries to aim for 2% core inflation or less.
Meanwhile, investors awaited the outcome of this week’s Federal Reserve policy meeting due to begin later in the day.
Market analysts expect the Fed to start cutting monthly bond purchases by USD10 billion to USD75 billion when it concludes its two-day policy meeting on Wednesday.
Monthly purchases of Treasuries will be scaled back by USD10 billion to USD35 billion, while mortgage-bond buying will remain unchanged at USD40 billion.
Gold prices were higher on Monday after former U.S. Treasury Secretary Lawrence Summers bowed out of the race to succeed Ben Bernanke as the next chairman of the U.S. central bank.
Summers’ was perceived as being likely to unwind economic stimulus measures more aggressively than the other main contender for the post, current Fed Vice Chairwoman Janet Yellen.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.
The precious metal is on track to post a loss of nearly 21% on the year as traders bet an improving U.S. economy would lead the Fed to unwind its stimulus program by the year's end.
Elsewhere on the Comex, silver for December delivery dropped 1.35% to trade at USD21.71 a troy ounce, while copper for December delivery advanced 0.35% to trade at USD3.234 a pound.
Prices also came under pressure amid expectations the Federal Reserve will start tapering its USD85-billion-a-month bond-buying program at the conclusion of its two-day policy meeting on Wednesday.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,315.20 a troy ounce during U.S. morning hours, down 0.2%. The December contract ended 0.7% higher on Monday to settle at USD1,317.80 a troy ounce.
Gold prices traded in a range between USD1,306.40 a troy ounce, the daily low and a session high of USD1,323.40 a troy ounce.
Gold futures were likely to find short-term support at USD1,303.20 a troy ounce, Monday’s low and the weakest level since August 8 and resistance at USD1,365.70, the high from September 12.
The U.S. Department of Labor said earlier that consumer prices rose by a seasonally adjusted 0.1% in August, below forecasts for a 0.2% increase, after rising by 0.2% in July.
Year-over-year, consumer prices rose at an annualized rate of 1.5% last month, compared to expectations for a 1.6% gain and slowing from 2% in July.
Consumer prices, excluding food and energy costs, inched up 0.1% in August, meeting forecasts. Core consumer prices rose 0.2% in July.
Core CPI increased at annualized rate of 1.8% last month, in line with estimates and up from 1.7% in July.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories.
The central bank usually tries to aim for 2% core inflation or less.
Meanwhile, investors awaited the outcome of this week’s Federal Reserve policy meeting due to begin later in the day.
Market analysts expect the Fed to start cutting monthly bond purchases by USD10 billion to USD75 billion when it concludes its two-day policy meeting on Wednesday.
Monthly purchases of Treasuries will be scaled back by USD10 billion to USD35 billion, while mortgage-bond buying will remain unchanged at USD40 billion.
Gold prices were higher on Monday after former U.S. Treasury Secretary Lawrence Summers bowed out of the race to succeed Ben Bernanke as the next chairman of the U.S. central bank.
Summers’ was perceived as being likely to unwind economic stimulus measures more aggressively than the other main contender for the post, current Fed Vice Chairwoman Janet Yellen.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.
The precious metal is on track to post a loss of nearly 21% on the year as traders bet an improving U.S. economy would lead the Fed to unwind its stimulus program by the year's end.
Elsewhere on the Comex, silver for December delivery dropped 1.35% to trade at USD21.71 a troy ounce, while copper for December delivery advanced 0.35% to trade at USD3.234 a pound.