April 10 (Reuters) - Gold prices edged lower on Friday
as the dollar firmed, but the metal remained on course for a
third consecutive weekly gain as renewed U.S.-Iran ceasefire
optimism softened inflation fears and expectations for higher
U.S. interest rates.
FUNDAMENTALS
* Spot gold was down 0.2% at $4,755.84 per ounce by
0055 GMT. The metal, however, has gained 1.8% so far this week.
* U.S. gold futures for June delivery fell 0.8% to
$4,779.20.
* Spot gold has fallen about 10% since the U.S.-Israel
conflict with Iran erupted on February 28, highlighting sharp
swings in investor sentiment during the ongoing crisis.
* The dollar index strengthened, making
greenback-priced bullion more expensive for other currency
holders.
* U.S. President Donald Trump announced a ceasefire in the
six-week-old Iran conflict late on Tuesday, reducing fears of
prolonged disruption and easing inflation concerns. This has led
investors to scale back expectations for further rate hikes,
offering support to gold.
* However, risks remain. Israeli Prime Minister Benjamin
Netanyahu said on Thursday he is seeking direct talks with
Beirut, a day after heavy bombardment in Lebanon killed more
than 300 people in Lebanon and briefly placed the U.S.-Iran
ceasefire in jeopardy.
* While a stronger dollar pressured prices in the short
term, easing geopolitical tensions and a more stable U.S. rate
outlook kept bullion on track for weekly gains.
* Brent crude oil prices fell more than 11% so far this
week, easing inflation concerns on optimism that the ceasefire
would result in a reopening of the Strait of Hormuz, the narrow
waterway that typically handles about one-fifth of global oil
trade.
* On the data front, the U.S. Personal Consumption
Expenditures index, the Federal Reserve's preferred inflation
gauge, advanced 2.8% in the 12 months through February, in line
with estimates, and likely rose further in March.
* Investors now await March's U.S. Consumer Price Index
data, due later in the day.
* Markets are pricing in a 31% chance for a U.S. rate cut of
at least 25 basis points at the Fed's December meeting,
according to CME's FedWatch Tool, up from the 21% in the prior
session.
* SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.14% to 1,057.96
tonnes on Wednesday.
* Among other metals, spot silver rose 0.1% to $75.11
per ounce, platinum lost 1.2% to $2,077.67, and palladium
fell 1.1% to $1,540.03.
DATA/EVENTS (GMT)
1230 US Core CPI MM, SA March
1230 US Core CPI YY, NSA March
1230 US CPI MM, SA March
1230 US CPI YY, NSA March
1230 US CPI Wage Earner March
1400 US Factory Orders MM February
1400 US U Mich Sentiment Prelim April
(Reporting by Noel John in Bengaluru; Editing by Sherry
Jacob-Phillips)
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