Gold gains over 2% after soft US inflation data
GLD•Other precious metals also advance
Among other metals, spot silver XAG= rose 2% to $58.79 per ounce, platinum XPT= added 1.6% to $1,629.83, and palladium XPD= climbed 4.8% to $1,307.30.
Gold rises on cooler U.S. inflation data
July 14 (Reuters) - Gold gained more than 2% on Tuesday after softer-than-expected inflation data boosted hopes of the U.S. Federal Reserve adopting a less hawkish stance.
Spot gold XAU= was up 1.6% at $4,063.78 per ounce by 1:30 p.m. EDT (1730 GMT), after falling to its lowest level since July 1 earlier in the session.
U.S. gold futures GCcv1 settled 1.6% higher at $4,069.70.
The U.S. dollar fell 0.6%, making greenback priced-bullion more affordable for other currency holders.
Geopolitical tensions add support to bullion
On the geopolitical front, Iran fired ballistic missiles at a U.S. air base in Jordan and the United States attacked Iranian targets for five hours in a battle for control of the Strait of Hormuz that has pushed up oil prices to four-week highs. O/R
"The resumption of serious hostilities with Iran will have headline inflation already higher this month, so gold's rally will be tempered to $4,200 over the next few sessions and perhaps $63-$64 in silver isn't out of the question," Wong said.
Higher inflation could prompt central banks to keep interest rates elevated for longer, weighing on non-yielding assets such as gold.
Traders eye more inflation data and Fed rate expectations
"Gold gallops higher on a surprisingly subdued CPI report that saw headline dive lower but more importantly, core unchanged versus 0.2%. This should drop rate hike expectations sharply at least for the July and September meetings," said Tai Wong, an independent metals trader.
