Gold steadies after US inflation spurs biggest drop in two months

Bloomberg

Gold was steady after closing down the most in two months in the wake of higher-than-expected US inflation data.
Bullion ended 1.3% lower after the consumer-price index figures were released.
It had been on an upward trend this month before the inflation data surprised markets.
Economists had expected the CPI to rise 8.1% in August from a year earlier, but the actual figure was 8.3%, prompting stocks to plummet and the dollar and Treasury yields to surge.
Bullion dipped below the $1,700 mark, which has been seen by some market analysts as a floor for the gold price so far this month. That threshold could be treated as the CPI report will keep the Federal Reserve on a hawkish track ahead of its meeting next week. Higher rates tend to weigh on non-interest bearing bullion.
Spot gold steadies after dipping below $1,700 an ounce.
“Stronger-than-expected inflation readings took the sheen off precious metals,” and the likelihood of a
100-basis-point rate hike at the Fed’s meeting has reached nearly 40%, said Gnanasekar Thiagarajan, director at Commtrendz risk Management Services.
“Prices are now inclined to test the long-term support around $1,670-$1,675 in the coming sessions.”
Gold inched up 0.1% to $1,703.69 an ounce at 6:14 am in London. The Bloomberg Dollar Spot Index fell 0.2% after rising 1.2%. Spot silver was flat and palladium declined, while platinum rose 0.2%.