Title: Gold futures waver ahead of consumer inflation report

Jan. 12, 2022 7:31AM ET

By: AnalysisWatch

Gold contracts slipped on Wednesday morning, with the precious metal fluctuating between slight gains and losses ahead of the release of a report on US consumer inflation, which could influence trading later in the session.

Commodity traders are waiting for the Consumer Price Index, which the Labor Department will release at 8:30 a.m. Eastern Time, and which could show prices rising more than 7% year-on-year. Such a rise would mark the highest level in about 40 years and reinforce the view that inflation is well above the Federal Reserve's 2% annual target.

Concerns about a surge in inflation, due in part to supply chain bottlenecks and fluctuations in demand, have helped to support prices for precious metals such as gold and silver in the near term.

February gold futures GCG22, 0.24% GC00, 0.24% fell $1.70, or less than 0.1%, to $1,816.90 an ounce after gaining 1.1% on Tuesday, taking the most active contract to its highest level since January 5.

Gold closed in positive territory for a third straight session on Tuesday - the longest winning streak since November 12, when a seven-session period ended.

Ricardo Evangelista, senior analyst at ActivTrades, said in a daily note that high inflation "will likely support the dollar and therefore weigh on the precious metal; however, if the CPI numbers disappoint on the downside, then there will be room for further gold gains."

On Tuesday, gold maintained gains after Federal Reserve Chairman Jerome Powell said the central bank's plans to raise interest rates should not hurt the economic expansion, essentially painting a picture of a "soft landing" rather than a recession.