Gold flat as investors seek direction from U.S. inflation data

FUNDAMENTALS

* Spot gold was flat at $1,675.29 per ounce, as of 0034 GMT. Bullion prices hit a three-week peak in the previous session, buoyed by a weaker U.S. dollar.

* U.S. gold futures fell 0.2% to $1,677.30.

* The U.S. consumer price index report is due on Thursday. Traders now expect a 65% odds of a 50-basis-point rate hike at the Fed’s December meeting.

* Gold is considered a hedge against inflation, but rising interest rates increase the opportunity cost of holding non-yielding bullion.

* The European Central Bank must not stop raising interest rates until underlying inflation has clearly peaked, but it may slow the pace of hikes once rates hit a level that starts to restrict growth, France’s central bank chief told the Irish Times.

* Focus is also on the U.S. midterm elections, which will determine control of Congress and could spur moves all over the market.

* Spot silver was up 0.1% at $20.80. Platinum rose 0.1% to $980.09 and palladium also gained 0.1% to$1,898.22.

* Raising fears of a slowdown, China’s exports and imports unexpectedly contracted in October, as a perfect storm of COVID-19 curbs at home and global recession risks dented demand and further darkened the outlook for a struggling economy.