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Gold flat near $1,800 as U.S. inflation data fuels uncertainty

09/15/2021 | 12:03am EDT

* Platinum hits an over nine-month low of $925.50/oz

* Spot gold may fall to $1,792/oz - technicals

Sept 15 (Reuters) - Gold held flat above the key psychological level of $1,800 on Wednesday, after a tamer-than-expected rise in U.S. inflation led to uncertainty on when the U.S. central bank would begin tapering its asset purchases.

Spot gold was steady at $1,802.21 per ounce by 0610 GMT, after hitting a one-week peak of $1,808.50 on Tuesday.

U.S. gold futures eased 0.2% to $1,804.30.

"With the CPI data coming in a bit lower than expected, for some that does push a possible (taper) announcement a little bit further down the road and that should be fairly supportive for gold prices," said ING analyst Warren Patterson.

Underlying U.S. consumer prices increased at their slowest pace in six months in August, lending credence to the Fed's view that high levels of inflation were transitory.

The data also raised expectations that the Fed may go slow on unwinding economic support measures and keep interest rates near zero for sometime. The U.S. central bank is due to hold its two-day monetary policy meeting next week.

Gold tends to gain when interest rates are low, which reduces the opportunity cost of holding non-yielding bullion.

The CPI sent the dollar index to a one-week low on Tuesday, while the benchmark U.S. 10-year yield hit its lowest reading since Aug. 24.

"I see gold holding above $1,800, as critical risks relating to COVID-19 and underlying economic activity incentivise central banks to keep the taps flowing, the key short-term driver of gold prices," said Michael Langford, director at corporate advisory AirGuide.

On the technicals front, spot gold may break a support at $1,798 and fall to $1,792, failing to break a resistance at $1,807, according to Reuters technical analyst Wang Tao.

Silver fell 0.5% to $23.71 per ounce.

Platinum hit an over nine-month low of $925.50 and was last down 1.2% to $928.24.

Palladium dipped 1% to $1,959.61.

(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips and Rashmi Aich)


ę Reuters 2021
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