PRECIOUS-Gold prices subdued as investors await U.S. inflation data

BY Reuters | ECONOMIC | 08/09/22 09:52 PM EDT
       Aug 10 (Reuters) - Gold prices struggled for momentum on
Wednesday, as investors refrained from making big bets ahead of
U.S. inflation data that is expected to influence the pace of
Federal Reserve rate hikes.

    FUNDAMENTALS
    * Spot gold        was down 0.1% at $1,791.60 per ounce, as
of 0127 GMT. U.S. gold futures        were down 0.2% at
$1,808.20.
    * Analysts polled by Reuters expect U.S. annual inflation to
have eased to 8.7% in July from 9.1% in June. Core inflation is
expected at 0.5% month-on-month            . The data is due at
1230 GMT.
    * The Fed hiked rates by 75 basis points each in June and
July to rein in soaring inflation. Although gold is seen as a
hedge against inflation, higher U.S. interest rates dull
non-yielding bullion's appeal.
    * Fed funds futures traders are now pricing for a 69.5%
chance of another 75-basis-point rate increase at the U.S.
central bank's next policy meeting in September.
    * The dollar index        held firm against its rivals,
making gold less appealing for other currency holders.
    * Benchmark U.S. 10-year Treasury yields             edged
higher to 2.7883%, increasing the opportunity cost of holding
non-interest bearing gold.
    * Japanese wholesale prices rose 8.6% in July from a year
earlier, data showed, slowing from the previous month's pace in
a sign inflationary pressure from higher fuel and raw material
costs was easing.
    * Spot silver        eased 0.1% to $20.48 per ounce,
platinum        was steady at $933.59, and palladium        was
unchanged at $2,215.29.

    DATA/EVENTS (GMT, July)
    0130 China PPI, CPI YY
    0600 Germany HICP Final YY
    1230 US CPI MM, SA
    1230 US CPI Wage Earner

 (Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu
Sahu)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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