GOLD STEADY, PLATINUM FALLS

GOLD STEADIED yesterday, shaking off initial declines as the dollar retreated after a slower-than-expected rise in US inflation cast doubts over the Federal Reserve’s tapering timeline.

Spot gold was steady at $1 793.20 (about R25 422) an ounce by 4.08pm, and US gold futures were also nearly flat at $1795 an ounce.

The US Labour Department said its consumer price index excluding the volatile food and energy components edged up 0.1 percent last month, missing expectations of 0.3 percent. That was the smallest gain since February and followed a 0.3 percent rise in July.

This miss is a “good news for bullion”, making a September taper announcement from the Fed less likely, said Ed Moya, senior market analyst at brokerage Oanda.

The Federal Open Market Committee (FOMC) is scheduled to next meet on September 21-22.

Right now the gold market is still in a flux, given its inability to stab above the $1 800 level and could likely keep consolidating going into the FOMC meeting, Moya added.

The recent data could reinforce the view that the Fed may go slow on unwinding economic support measures and keep interest rates low, translating into reduced opportunity cost for holding non-interest bearing bullion.

The inflation data comes on the heels of comments from several Fed officials that the central bank should begin tapering asset purchases this year.

Among other metals, palladium fell more than 5 percent to over oneyear low of $1 967.23 an ounce and platinum fell 2.4 percent to $937.45 an ounce.

“Supply chain weakness effecting particularly chips and car manufacturing is having a depressing effect on the platinum group metals,” independent analyst Ross Norman said.

Silver fell 0.4 percent to $23.63 an ounce.