Gold futures traded higher on Wednesday, looking to score their first gain in three sessions after data showed U.S. inflation remained flat in November.
Gold for February delivery GCG9, +0.35% on Comex rose $4.20, or 0.3%, to $1,251.40 an ounce, while March silver SIH9, +1.45% was up 18.2 cents, or 1.2%, to $14.81 an ounce.
The consumer-price index was unchanged in November, matching the forecast of economists polled by MarketWatch. Core CPI, which strips out volatile food and energy costs, rose 0.2%, also in line with expectations.
Gold has taken its cues from the dollar and expectations the Federal Reserve could be less aggressive in hiking interest rates next year than previously expected. The ICE U.S. Dollar Index DXY, -0.46% a gauge of the U.S. currency against major rivals, was off 0.3%. A weaker dollar can provide a lift to commodities priced in the unit as it makes them cheaper to users of other currencies.
A stronger dollar kept gold under pressure in Tuesday’s session.
“Despite two days of decline, gold is still hanging above $1,240,” said Carlo De Casa, chief analyst at ActivTrades. “This confirms the positive picture for bullion, which is standing above $1,235 even with the greenback gaining ground in the last two sessions.”
Volatility in stocks and other financial markets can also affect gold, which is often viewed as a haven asset during periods of turmoil. Benchmark U.S. stock indexes were trading higher on Wall Street Wednesday.
But analysts said concerns over the U.S. economic outlook could underpin the metal over the longer term.
Analysts at J.P. Morgan think gold could struggle for clear direction as the new year dawns, though they see an upside bias.
“We maintain our neutral view on gold through [first-half] 2019 and retain our bullish bias over [second-half] 2019 and 2020 and still see prices rising above $1,400/oz as the development of an inverted yield curve in the U.S. likely attracts renewed investor interest in gold,” said analysts Natasha Kaneva and Gregory Shearer, in an outlook.
An inverted yield curve, in which short-dated Treasury yields rise above longer-dated yields, is often viewed as a potential recession harbinger. The U.S. yield curve has flattened in 2018 but has yet to see the sort of inversion that typically trips alarm bells.
In other metals trade, January platinum PLF9, +1.76% rose 1 to $793.30 an ounce, while March palladium PAH9, +1.26% gained 1.1% to $1,190 an ounce. It looked to top Dec. 4’s settlement of $1,180.20 to tally another record.
March copper HGH9, +0.04% was off 0.2% at $2.762 a pound.