Gold held steady near one-week highs on Wednesday, sandwiched between pressure from a stronger dollar and support from expectations that the U.S. Federal Reserve is done with hiking interest rates.
Spot gold was largely unchanged at $1,961.89 per ounce by 12:07 p.m. ET (1707 GMT). U.S. gold futures were also mostly flat at $1,965.70.
Denting bullion’s appeal, the dollar index was up 0.3%, while benchmark 10-year U.S. Treasury yields rebounded after a revision of retail sales data showed strong gains in September.
Bullion gained nearly 1% in the previous session after data showed that U.S. consumer prices were unchanged in October. U.S. producer prices fell by the most in 3-1/2 years in October, the latest indication of inflation pressures easing.
“The results from CPI and PPI are positive and it continues to support gold prices with the expectation that inflation will continue to pull back adding to the expectations that the Fed is done raising interest rates,” said David Meger, director of metals trading at High Ridge Futures.
The market is pricing in a 100% chance that the U.S. central bank will leave rates unchanged in December, according to the CME FedWatch tool.
While gold is considered an inflation hedge, rising interest rates dull non-yielding bullion’s appeal to investors.
“With yields backing up gold is lower after the initial spike up. I think the outlook will remain positive for (gold) assets but the moves will be more measured,” said Tai Wong, a New York-based independent metals trader.
Investors also looked at data that showed that U.S. retail sales fell in October, though by less than expected, after months of strong gains, pointing to slowing demand that could further strengthen expectations of a rate-hike pause.
Spot silver rose 1.5% to $23.43 per ounce after touching its highest since Oct. 20 earlier.
Platinum was up1.3% to $896.95 and palladium jumped 2% to $1,036.99. Both metals were eyeing their third straight day of gains.