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PRECIOUS-Gold holds steady as equities rally offsets softer dollar

Published 14/04/2021, 08:32 pm
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* U.S. dollar index eases

* U.S. CPI gains by the most in over 8-1/2 years in March

* Not many triggers to move gold much either way - analyst (Updates prices)

By Sumita Layek

April 14 (Reuters) - Gold prices were little changed on Wednesday as global equity markets held near record highs, offsetting support for bullion from a softer dollar and data showing a jump in U.S. inflation.

Spot gold XAU= was steady at $1,744.20 per ounce, as of 1159 GMT. U.S. gold futures GCv1 fell 0.1% to $1,745.20.

"Gold reacted positively to the U.S. inflation data, because bond yields were down and the dollar was also weaker, and so that certainly lends support to gold," said Commerzbank (DE:CBKG) analyst Daniel Briesemann.

However, he added, record high global equities are "a sign of high risk appetite ... Investors are looking for some other possibilities to invest in than gold where they can find higher yields." MKTS/GLOB

Bullion jumped as much as 0.9% on Tuesday after U.S. consumer prices soared the most in more than 8-1/2 years in March. Gold is often viewed as a hedge against inflation. U.S. dollar was down, making gold cheaper for holders of other currencies. However, benchmark Treasury yields recovered slightly, increasing the opportunity cost of holding gold. USD/ US/

Bullion was also supported by comments from Philadelphia Federal Reserve President Patrick Harker who said the Fed will not withdraw its funding just yet even as the U.S. economy could expand by 5% to 6% this year. seems that over the near term there are not many new triggers to substantially move gold prices either way, but the inflation outlook remains the key determinant," said Xiao Fu, head of commodities markets strategy at Bank of China International.

"The bias might still be skewed to the downside if we're talking about the coming months because the momentum, especially in the United States, could continue in Q2 and Q3... (and) other economies are also recovering."

Silver XAG= rose 0.2% to $25.37 per ounce and palladium XPD= eased 0.5% at $2,675.21. Platinum XPT= gained 1.7% to $1,175.08.

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