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Gold Gains as Market Awaits Inflation Data

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02/14/2018 | 12:50 pm

By Christopher Alessi

LONDON--Gold prices continued to rise Wednesday morning, boosted by a depreciating U.S. dollar.

The precious metal was up 0.20% at $1,331.89 a troy ounce on the London Metal Exchange.

The Wall Street Journal Dollar Index, which measures the U.S. currency against a basket of 16 of its peers, was down around 0.16% Wednesday, while year-to-date losses have approached 3% over the past week.

The dollar tends to have an inverse relationship with dollar-denominated commodities like metals and oil, as a weaker dollar makes them less expensive for holders of other currencies.

Gold is "in the process of recouping the losses it incurred over the past two to three weeks," analysts at Commerzbank wrote in a daily note Wednesday.

Metals market observers are looking ahead to the publication of U.S. inflation data later Wednesday. If inflation rates increased last month, it could spur concerns the U.S. Federal Reserve might raise interest rates at a faster pace than planned, weighing on equities markets. "This could spark a renewed flight into safe havens, which would benefit gold, " according to Commerzbank.

Among other precious metals, silver was up 0.24% at $16.61 a troy ounce, platinum rose 0.20% to $975.75 a troy ounce and palladium rose 0.18% to $988.25 a troy ounce.

Meanwhile, copper prices fell by 0.46%, to $6,985 a metric ton on the LME, as the market consolidated gains from Tuesday ahead of the U.S. report on inflation.

"All eyes will now turn to this afternoon's U.S. inflation data--and rather than the headline data, the focus will be on how the dollar reacts," according to Alistair Munro, an analyst at on the LME desk of brokerage Marex Spectron.

Among other base metals, zinc was up 0.09% to $3,472 a metric ton, aluminum was down 0.57% to $2,126.57 a metric ton, tin was up 0.21% at $21,620 a metric ton, nickel was up 1.68% at $13,650 a metric ton and lead was up 0.53% at $2,564 a metric ton.

Write to Christopher Alessi at

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