September 13, 2018 / 1:31 AM / 2 months ago

PRECIOUS-Gold rises slightly as soft U.S. data tempers rate hike views

BENGALURU, Sept 14 (Reuters) - Gold prices edged higher on Friday as softer-than-expected U.S. consumer prices data dimmed the case for a faster pace of policy tightening by the Federal Reserve.

FUNDAMENTALS

* Spot gold was up 0.2 percent at $1,203.55 an ounce as of 0108 GMT. The bullion hit its highest since Aug. 28 at $1,212.65 on Thursday before reversing its course to close 0.4 percent lower. It has gained 0.7 percent so far this week, heading for its first weekly gain in three.

* U.S. gold futures were mostly steady at $1,208.50 an ounce.

* U.S. consumer prices rose less than expected in August as increases in gasoline and rents were offset by declines in healthcare and apparel costs, and underlying inflation pressures also appeared to be slowing.

* The CPI data came after soft U.S. wholesale price data. The U.S. central bank is widely expected to raise benchmark interest rates at its September meeting.

* Higher rates make gold less attractive since it does not pay interest and costs to store and insure.

* In trade talks, Chinese officials have welcomed an invitation from Washington for new round of talks. But U.S. President Donald Trump tempered market expectations, tweeting on Thursday that the United States is “under no pressure to make a deal with China.”

* The Trump administration is readying a final list of $200 billion in Chinese imports on which it plans to levy tariffs in the coming days.

* The months-long trade rift between Washington and Beijing has prompted investors to buy the U.S. dollar in the belief that the United States has less to lose from the dispute. This has driven investors toward record short positions in Comex gold and heavy liquidations in gold exchange-traded funds.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.36 percent to 742.53 tonnes on Thursday from Wednesday.

* South African miner Gold Fields Ltd aims to extend the life of its Cerro Corona gold mine in Peru through 2040 with an investment of at least $240 million, the company’s vice president for the Americas said late on Wednesday.

DATA AHEAD (GMT)

0200 China Industrial output Aug

0200 China Retail sales Aug

0200 China Urban investment Aug

0900 Euro zone Eurostat trade Jul

1230 U.S. Import prices Aug

1230 U.S. Export prices Aug

1230 U.S. Retail sale Aug

1315 U.S. Industrial outpout Aug

1400 U.S. Business inventories Jul

1400 U.S. Univ of Michigan sentiment index Sep (Reporting by Nallur Sethuraman in Bengaluru; Editing by Subhranshu Sahu)

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