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PRECIOUS-Gold steady as investors bet on more stimulus-led inflation

Published 14/01/2021, 02:58 am
© Reuters.
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* U.S. Fed's Beige Book due at 1900 GMT

* Fed officials expect U.S. economy rebound on vaccinations

* Interactive graphic tracking global coronavirus spread: https://tmsnrt.rs/3mvcUoa (Updates prices)

By Shreyansi Singh

Jan 13 (Reuters) - Gold prices held steady on Wednesday, underpinned by data showing a rise in consumer prices in the United States and expectations that more fiscal stimulus from a Joe Biden administration could trigger higher inflation.

Spot gold XAU= was little changed at $1,854.84 an ounce by 1.44 p.m. EST (1844 GMT). U.S. gold futures GCv1 settled up 0.6% at $1,854.90.

Bob Haberkorn, senior market strategist at RJO Futures, said expectations for more stimulus, higher-than-expected inflation and safe-haven buying driven by the political environment in the United States were keeping gold supported.

The Labor Department on Wednesday said its consumer price index increased 0.4% last month after gaining 0.2% in November. shows that there's a slight uptick in inflation, which is always supportive of gold," Haberkorn said. capping bullion's gains, the dollar firmed and benchmark 10-year Treasury yields US10YT=RR hovered close to their highest level in nearly 10 months. US/ USD/

Gold is generally considered a hedge against the inflation and currency debasement that can result from widespread stimulus. However, higher bond yields have challenged that status recently as they increase the opportunity cost of holding non-yielding bullion.

"Complacent positioning in gold is being shaken up, that's a direct result of the blue sweep which forced the markets to price in a substantial increase in treasury supply," said Daniel Ghali, commodity strategist at TD Securities.

U.S. President-elect Biden said he would unveil a plan on Thursday to provide trillions of dollars of support for the American economy as it grapples with the coronavirus crisis. exchange-traded funds storing gold for investors shrank for a second month in December, but nevertheless grew more than ever before in 2020, the World Gold Council said. other precious metals, silver XAG= fell 0.5% to $25.45 an ounce, platinum XPT= rose 2.2% to $1,099.55 and palladium XPD= edged 0.2% higher to $2,396.71.

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