Gold steadies above two-week low ahead of U.S. inflation
LONDON (Reuters) - Gold steadied after hitting a two-week low on Thursday as the dollar softened ahead of U.S. consumer inflation data which will be closely watched for clues about the likely pace of Federal Reserve interest rate increases.
The U.S. currency was down 0.1 percent against a basket of currencies in early trade, having posted its biggest one-day rise in six weeks on Wednesday.
Spot gold was at $1,322.80 an ounce at 0940 GMT, little changed from $1,322.85 late on Wednesday but above an earlier low of $1,318.75, its weakest since Sept. l.
U.S. gold futures for December delivery were down $1.30 at $1,326.70.
With near record short positions in the dollar, any signs that U.S. inflation is picking up could support the case for another rate rise and send the dollar significantly higher, analysts said.
"We still expect the Fed to hike rates in December, which the market doesn't. That is part of our bullish view on the dollar and in turn our more cautious view on gold," Julius Baer analyst Carsten Menke said.