March 13, 2018 / 4:39 AM / 2 months ago

PRECIOUS-Gold dips ahead of key U.S. data

 (Updates with latest prices)
    * Spot gold looks neutral in a range of $1,318-$1,327/oz
    * All eyes on U.S. CPI data due at 1230 GMT

    By Nithin ThomasPrasad
    March 13 (Reuters) - Gold prices fell on Tuesday on a firmer
dollar as investors waited for U.S. consumer price data due
later in the day to gauge the outlook for inflation and the
Federal Reserve's rate hike stance.
    Spot gold        was down 0.2 percent at $1,319.87 per ounce
as of 0711 GMT, while U.S. gold futures         for April
delivery fell 0.1 percent to $1,320.00 an ounce.
    The dollar index       , which measures the U.S. Dollar
against a basket of currencies, was up 0.12 percent at 90.004.
    "Gold traders are adopting a more neutral stance ... While a
March hike is fully priced in, traders usually get a bit anxious
awaiting the Fed statement and key forward guidance," said
Stephen Innes, APAC trading head at OANDA.
    "We should expect interest rate uncertainty to weigh on
prices over the short term."    
    The U.S. government is expected to release consumer price
index (CPI) data at 1230 GMT, a key focus for the day. The
median forecast by economists polled by Reuters points to annual
core CPI inflation of 1.8 percent in February, which would be
flat from January.             
    A higher reading could stoke expectations that the Federal
Reserve will likely raise interest rates four times, rather than
three times, this year. Higher interest rates increase the
opportunity cost for non-yielding bullion.    
    Any outcome above expectations will put gold under pressure,
said Richard Xu, a fund manager at HuaAn Gold, China's biggest
gold exchange-traded fund.    
    In the longer term, Xu expected gold to be range bound this
year, although an expected slowdown in the Chinese economy will
provide support.
    In February, growth in China's manufacturing sector cooled
to the weakest in over 1-1/2 years, raising concerns of a
sharper-than-expected slowdown in the world's second biggest
economy this year as regulators tighten the screws on financial
risks.                    
    Spot gold looks neutral in a range of $1,318-$1,327 per
ounce and an escape could suggest a direction, according to
Reuters Technical analyst, Wang Tao.         
    In other precious metals, silver        rose 0.1 percent to
$16.50 per ounce
    Platinum        fell 0.4 percent to $959.24 an ounce, while
palladium        edged 0.2 percent lower to $977.00 per ounce.

 (Reporting by Nithin Prasad and Eileen Soreng in Bengaluru
Editing by Richard Pullin and Subhranshu Sahu)
  
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