GOLD prices inched down on Wednesday (May 15) ahead of a key US inflation data that could offer insight into the Federal Reserve’s interest rate trajectory.

Spot gold was down 0.1 per cent at US$2,355.24 per ounce, as at 0101 GMT. Bullion prices rose 1 per cent on Tuesday.

US gold futures were steady at US$2,361.10.

Markets’ focus will be on the US Consumer Price Index data due at 1230 GMT.

US producer prices increased more than expected in April amid strong gains in the costs of services and goods, indicating that inflation remained elevated early in the second quarter.

Meanwhile, Fed chair Jerome Powell said he expects US inflation to continue declining through 2024 as it did last year and noted it was unlikely the Fed would have to raise interest rates again.

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Federal Reserve Bank of Cleveland president Loretta Mester said that it was appropriate for the Fed to hold rates steady as it awaits evidence that price pressures are easing further.

Lower interest rates reduce the opportunity cost of holding non-yielding gold.

The Australian-listed shares of BHP Group rose 2.3 per cent on Wednesday after its takeover target Anglo American announced a break-up plan to defend itself against a US$43 billion offer.

Asian markets should open in upbeat mood as lower US bond yields and a weaker US dollar reflect expectations that the Fed will cut interest rates as early as September, but the apparent serenity could be shattered in a flash.

Spot silver fell 0.2 per cent to US$28.52 per ounce, platinum was up 1.6 per cent at US$1,047.73 and palladium gained 0.9 to US$986.15. REUTERS