Gold Prices with Slight losses - US Inflation Data in focus

 Gold prices with slight losses - US inflation data in focus

Gold prices were slightly weaker in Asia on Thursday morning and are currently range bound. Many investors are currently awaiting the latest US inflation data, which could provide further clues to the Fed's tightening schedule.

The gold futures traded on the COMEX arm of the New York Stock Exchange Nymex is down 0.08% as of 5:55 a.m. ET to trade at $1,835.05 a troy ounce. That was close to Wednesday's high of $1,835.60.

The dollar , which normally trades inversely to the price of gold, was stronger on Thursday. Meanwhile, benchmark 10-year Treasury yields fell below their November 2019 peak.

US CPI data will also be released today .

Many investors trading fed funds futures are already pricing in more than five 25 basis point rate hikes through December 2022. The probability of an initial interest rate hike of 50 basis points in March is currently given as 27%. For its part, however, the Fed is being forced to act more quickly than before in order to get inflation under control. Meanwhile, Cleveland Fed chair Loretta Mester sees no need to raise interest rates by half a percentage point in March.

Bank of England Governor Andrew will also address these issues later today.

Meanwhile, geopolitical tensions in Eastern Europe continue as Russia increases its military presence along its borders with Ukraine and Belarus. Although the Ukrainian side believes that the standoff between the Western powers and Russia can be resolved through diplomatic channels, Ukraine's Foreign Minister Dmytro Kuleba is already giving reasons for imposing sanctions on Russia.

Among the other precious metals, silver and platinum each lost 0.3%, while palladium is stable at $2,279.51.

FX Midday Report: US Dollar flat ahead of US Inflation data

Investors are eagerly awaiting US January consumer price data due Thursday afternoon, which could provide further clues to the Federal Reserve Bank's (Fed) tightening schedule.

Munich – In European trading on Thursday morning, the US dollar continued to move within the sideways range established after reaching a two-and-a-half-week low last Friday, with a broad base (measured by the US dollar index) with a slightly negative trend.

Investors are eagerly awaiting today's January US consumer price data, which could provide further clues to the Federal Reserve Bank's (Fed) tightening schedule. Consensus analysts expect inflation to rise further to 7.3 percent yoy, up from 7.0 percent in December.

The market takes it for granted that the US Federal Reserve will start its interest rate hike cycle in March to curb inflation. However, it is questionable how inflation will develop and how many interest rate hikes the Fed will follow this year. Fed fund futures are already pricing in more than five 25 basis point rate hikes through December 2022, with the probability that the Fed will start a big 50 basis point rate hike in March currently stands at 27 percent, according to the CME's FedWatch tool.

Cleveland Fed Chair Loretta Mester said Wednesday the Fed will have to scale back monetary accommodation faster than in the past to deal with well-above-target inflation, but that it may not be necessary to start the rate hike cycle in March with half a percentage point.

EUR/USD gains up to 1.1446 so far on Thursday morning high. The EU Commission has raised its forecast for inflation in the euro zone this year to 3.5 percent on an annual average - a new high. In its autumn forecast, the Brussels authorities had still assumed 2.2 percent inflation for 2022.