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Metals Stocks: Gold futures rise, but pare gains after CPI inflation report

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Gold futures trimmed gains on Wednesday, as investors digested reports on U.S. inflation and prepared for an account of the Federal Reserve’s Sept. 21-22 meeting later in the session.

A September consumer-price index reading due rose 0.4%, versus expectations for 0.3% on the month. Excluding the volatile food and energy components, the CPI climbed 0.2% after edging up 0.1% in August, the smallest gain in six months. In the 12 months through September, the CPI increased 5.4% after advancing 5.3% year-over-year in August and annualized core CPI rose 4.0% after increasing 4.0% in August.

December gold
GCZ22,
+0.33%

GC00,
+0.19%

was trading $1.80, or less than 0.1%, at $1,761.30 an ounce, following a 0.2% gain on Tuesday. At the intraday high, the contract had been at $1,778.50, which would mark the highest settlement since late September if levels had held, FactSet data show.

Meanwhile, silver for December delivery
SIZ21,
+1.34%

traded 21 cents, or 1.1%, to $22.72 an ounce, following a 0.7% decline a day ago.

Gold has been mostly registering small losses and trading in a relatively tight range between $1,750 and around $1,770 an ounce. Gold bulls have noted that the precious metal has managed to maintain relative strength despite a stronger U.S. dollar and a steady climb in benchmark Treasury yields, which can compete against bullion for those investors seeking a perceived haven in uncertain times.

“In the commodity complex, gold has displayed some remarkable resilience in recent sessions, absorbing a stronger dollar and the spike in yields without much trouble,” wrote Marios Hadjikyriacos, senior investment analyst at XM, in a daily note.

Meanwhile, the Fed’s minutes of the Semptember meeting are set to be released at 2 p.m. ET, half an hour after Comex traded commodities settle. However, there aren’t likely to be surprises in the report, as the Fed’s No. 2 Richard Clarida signaled earlier this week that the economic recovery from COVID-19 had essentially met the criteria necessary to announce a reduction of monthly asset-purchases of Treasurys and mortgage-backed securities that have been in force since June of 2020.

Such a tapering might help to extend the climb for yields and weigh on bullion.

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