Gold enjoyed somewhat of a mixed day on Tuesday, recording gains before the release of US data, trimming those increases after the figures were published before finally rising again later on in the afternoon.
Gold was up over 1% in early trading, before falling back after US economic data failed to give any real clarity on the prospects of a US interest rate rise in the coming months.
US consumer prices were unchanged in July, although the price of petrol fell for the first time in five months.
Inflation dipped slightly, while housebuilding and industrial production both rose slioghtly more than forecast.
All in all, the numbers were a mixed bag that didn’t really offer investors any useful or conclusive information.
Analysts have speculated that the Fed might push up interest rates as early as next month, a move that would be bad for gold as higher rates increase the opportunity cost of holding non-yielding commodities like the precious metal.
The dollar was down against a basket of other currencies, ensuring gold would end the day slightly up on yesterday’s close, as the greenback and the metal tend to move in opposite directions.
Credit Suisse bullish on gold
Swiss banking giant Credit Suisse has reiterated its bullish outlook for the precious metal, expecting it to continue its rise throughout the rest of the year.
In a note, the bank forecasts the price of gold to rise to US$1,475 in the final quarter of this year, “primarily due to continued investment demand through ETF (exchange traded fund) purchases and bar/ coin hoarding on prolonged macro uncertainty.”
The bank added that negative interest rates, as well as its forecasts that mining supply will dip in coming months, will also contribute to increased prices towards the end of the year.
The bank added that the yellow metal is “tracking in line” with its US$1,350 price prediction for the third quarter of 2016.
Shortly after UK market close, gold was up US$9 to US$1,348, silver was up 7c to US$19.87 and platinum was also up US$10 to US$1,118.