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Gold Steady Ahead of U.S. Inflation Data

Gold Steady Ahead of U.S. Inflation Data

Gold prices held firm on Tuesday, supported by a weaker dollar, while investors await the U.S. inflation data for clues on the pace of interest rate hikes.

Spot gold climbed 0.3 percent to $1,326.51 per ounce. On Monday, it increased 0.5 percent in its largest one-day percentage gain in over a week.

U.S. gold futures were down 0.1 percent at $1,324.6 an ounce.

Holdings of SPDR Gold Trust, the largest gold-backed exchange-traded-fund (ETF), dropped 2.5 percent last week, the worst since the week ended July 30.

Investors await the U.S. inflation data for January which is set to be released on Wednesday.

Inflation expectations were slightly lower last month, dulling a year-end rise, according to a recent survey published by the Federal Reserve Bank of New York.

Worries on inflation generally boost gold, which is seen as a safe haven against rising prices. However, expectations that the Fed will hike interest rates to fight inflation make gold less attractive because it does not pay interest.

In other precious metals, silver climbed 0.8 percent to $16.48 per ounce, platinum was up 0.2 percent at $972.50 an ounce and palladium rose 0.2 percent to $986.80 per ounce.

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