(Reuters) – Feb 8 (Reuters) – Gold prices held steady near a two-week peak on Tuesday, buoyed by mounting inflation concerns and Russia-Ukraine tensions, although expectations for a U.S. interest rate hike limited gains.
Spot gold XAU= was up 0.1% at $1,822.20 per ounce by 10:00 a.m. EST (1500 GMT), after hitting its highest since Jan. 26 at $1,824.41 earlier in the session.
U.S. gold futures GCv1 were little changed at $1,821.20, ahead of U.S. inflation data due on Thursday.
“There’s this more of a wait-and-see approach with some of the bigger data that’s coming out later this week. Gold has shown it’s forming massive support around $1,800 and this will be an important week for gold,” said Edward Moya, senior market analyst at brokerage OANDA.
U.S. consumer prices for January are expected to rise 7.3% annually, according to a Reuters poll, after robust labor data last week fanned inflation fears.
Gold prices have been stuck in range-bound trade since the beginning of the year, caught between rising inflation worries and growing expectations of Federal Reserve interest rate hikes.
“If actual (inflation) data issues as expected or higher, the dollar should strengthen along with U.S. Treasury yields leaving gold with substantial downside pressure,” DailyFX analyst Warren Venketas wrote in a note.
Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion. Higher rates also boost the dollar, pressuring the greenback-priced precious metal.
The dollar index .DXY rose 0.3%. The benchmark 10-year U.S. Treasury yield hit a more than two-year peak. USD/ US/
Silver XAG= rose 0.5% to $23.10, platinum XPT= climbed 1.1% to $1,031.11 and palladium XPD= was up 0.2% to $2,266.63.
(Reporting by Seher Dareen in Bengaluru; Editing by Sherry Jacob-Phillips)
