Gold rises as dollar eases, focus on U.S. inflation data

8 August 2017: Gold prices edged up on Tuesday as the dollar eased slightly, with investors waiting for U.S. inflation numbers later this week for hints on the pace of monetary tightening by the Federal Reserve.

"Gold appears to be in a holding pattern with the increasing risk that stale long positioning may see traders head for the door until some directional clarity is restored," said Jeffrey Halley, senior market analyst at OANDA.

Spot gold had risen 0.2 percent to $1,259.43 per ounce by 0415 GMT. U.S. gold futures for December delivery advanced 0.1 percent to $1,265.70 per ounce.

"There aren't many players in the market, nor is there much incentive (for prices) to move right now, so I think it's going to be very quiet for the rest of the month," said Yuichi Ikemizu, Tokyo branch manager at ICBC Standard Bank.

"I expect prices to creep higher (in the short term) as the dollar is still weak and that is the prevailing trend."

Asian shares went flat on Tuesday as disappointing Chinese trade data clouded the otherwise upbeat outlook on global growth, leaving currencies and commodities becalmed in summer doldrums.

The U.S. dollar inched down, not far from multi-month lows touched last week, as investors awaited data due later this week that will offer clues about the extent to which the strengthening labour market is spilling over into inflation.

The dollar index, which tracks the greenback against a basket of six major rivals, slipped slightly on the day to 93.333. A weaker dollar makes bullion cheaper for non-U.S. investors.

Spot gold may retest support at $1,255 per ounce, a break below which could cause a further loss to the next support level at $1,247, said Reuters technical analyst Wang Tao.

"Given the move towards tighter monetary policy ... the developing bullish chart picture may be a warning that investors are buying more gold as an insurance against heightened risk of trouble ahead," ScotiaBank analysts said in a note.

Meanwhile, holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell to 786.87 tonnes on Monday.

In other precious metals, silver rose 0.3 to $16.28 per ounce. In the previous session, it retouched its July 20 low of $16.10 an ounce, the weakest since July 18.

Platinum gained 0.4 percent to $966.90 per ounce and palladium inched 0.2-percent higher to $887.30 per ounce.

"Platinum is being supported by strong fundamentals as supply in comparison to the demand is a little weak," said ICBC's Ikemizu.