Gold holds ground above 3-month low

Gold prices rose in European trade above three-month lows on track for the first profit in three days, ahead of crucial US inflation data.

Gold Prices

Prices rose 0.9% to $1,854 an ounce, after closing down 0.9% yesterday, the second loss in a row, as the dollar index hit 20-year highs.

US Dollar

The dollar index fell 0.4% on Wednesday on track for the first loss in four sessions off 20-year highs at 104.19.

The dollar is slipping now after statements from Fed officials, which cut the chances of a 0.75% rate hike next month.

US Inflation

From the US, consumer prices are expected up 0.2%, compared to a 1.2% rise in February, while core prices are expected up 6%, slowing down from 6.5% in March.

Inflation data will play a crucial role in determining the path forward for policy decisions. 

Now analysts expect gold to hold around $1,830 an ounce, and potentially fall below $1800 if inflation hit fresh record highs.

The SPDR

Gold holdings at the SPDR fell 7.25 tones to a total of 1,075 tones, the lowest since March 15.