Gold prices held above the key psychological level of $1,800 as the dollar and bond yields came under pressure after a tamer-than-expected rise in U.S. inflation led to uncertainty on when the U.S. central bank will begin tapering its asset purchases.
Spot gold was steady at $1,802.86 per ounce, as of 0120 GMT on Wednesday, having hit a one-week peak of $1,808.50 in the previous session.
U.S. gold futures eased 0.2% to $1,803.80.
Consumer Price Index (CPI) was up just 0.1% last month, compared with an expected increase of 0.3%. That was the smallest gain in six months suggesting that inflation had probably peaked, though it could remain high for a while amid persistent supply constraints.
The data has thrown a shade of uncertainty over the Federal Reserve's taper timeline. The Fed will hold a two-day monetary policy meeting next week.
The CPI data weighed on the dollar index, while the benchmark U.S. 10-year yield hit its lowest reading since Aug. 24.
Lower yields reduce the opportunity cost of holding the non-interest bearing bullion.
Japanese manufacturers' confidence worsened to a five-month low in September as the fallout from the latest wave of COVID-19 put fresh pressure on the world's third-largest economy, the Reuters Tankan poll showed.
Silver fell 0.1% to $23.81 per ounce.
Platinum hit an over nine-month low of $930.85 and was last down 0.4% to $935.60.
Palladium was flat at $1,979.16. Prices touched their lowest level since July 2020 at $1,935 in the previous session. DATA/EVENTS (GMT) 0200 China Urban Investment (YTD) YY 0200 China Industrial Output YY 0200 China Retail Sales YY 0600 UK CPI YY 0645 France CPI (EU Norm) Final MM, YY 1000 EU Reserve Assets Total 1315 US Industrial Production MM (Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips)
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