Gold prices held on to overnight gains on Thursday, after data showing U.S. consumer price increases slowed in July soothed concerns of an early tapering of economic support.
Spot gold was little changed at $1,750.34 per ounce by 0104 GMT, having recorded it biggest one-day percentage gain since May 6 on Wednesday.
U.S. gold futures were flat at $1,753.40.
U.S. consumer prices increases slowed in July even as they remained at a 13-year high on a yearly basis and there were tentative signs inflation has peaked as supply-chain disruptions caused by the pandemic work their way through the economy.
Gold is viewed as a hedge against higher inflation, but a Fed rate hike would dull bullion’s appeal as that would increase the opportunity cost of holding the non-yielding metal.
The U.S. economy is growing at a robust pace and the labor market is rebounding, signaling it is nearly time for the Federal Reserve to start withdrawing its support, several U.S. central bank officials said on Wednesday.
Meanwhile, the dollar index was flat after retreating from an over four-month high.
China’s tighter social restrictions to fight its latest Covid-19 outbreak, now in its fourth week and involving more than a dozen cities, are hitting the services sector especially travel and hospitality.
Silver fell 0.2% to $23.47 per ounce. Platinum was steady at $1,017.91 and palladium rose 0.1% to $2,638.14.