Gold prices stabilize before release of US inflation data

Gold prices stabilized on Wednesday, with the dollar rising near its highest level in three weeks, and before the release of inflation data in the United States.

Gold futures contracts for December delivery settled at $1,731.2 per ounce, at 09:40am Makkah time, while the immediate delivery price rose marginally by 0.2% to $1,732.61 per ounce.

Elsewhere, silver futures for September delivery settled at $23.33 an ounce, while spot price for platinum rose 0.6% to reach $1,005.97, while palladium fell 0.1% to reach $2,644.45.

The dollar index, which measures the performance of the US currency against a basket of six currencies, rose 0.1% to 93.154 points.

Stephen Innes, Managing Partner at SPI Asset Management, told Reuters that although the continuing fears of the COVID-19 outbreak provide some support to gold demand, it is still struggling to recover from the sudden drop early this week.

"The Fed's monetary tightening tendency, along with the strong US jobs data, is making the markets a little nervous about appetite for the yellow metal,” Innes added.

Investors are awaiting the release of US inflation data for July later today, Aug. 11, amid expectations of a 0.5% increase in the CPI, in addition to the release of PPI data tomorrow, Aug. 12.