Gold is trading in a limited range due to doubts about the Fed’s position on inflation

The oro traded in a narrow range on Thursday, as investors remained divided on the pace at which the United States Federal Reserve (Fed) will cut its monetary stimulus and increase interest rates, after recent data that showed a marked jump of inflation in the country.

Spot gold was down 0.3% at $ 1,859.60 an ounce at 1035 GMT, although it showed slight variations on the day. Gold futures in the United States fell 0.2% to $ 1,866.90 an ounce.

The dollar paused its uptrend on Thursday and fell back from 16-month highs as traders assessed whether the current streak of gains was beginning to stall. A weaker dollar makes gold more attractive to buyers who own other currencies.

“Right now, it is difficult for gold to find a direction due to uncertainty related to the performance of the dollar and the likely response of the US Fed and other central banks to inflation.”Said ActivTrades senior analyst Ricardo Evangelista.

Gold, seen as a hedge against inflation, has benefited from rising consumer prices in the United States and Europe. But this factor has also reinforced bets on anticipated interest rate hikes, which would increase the opportunity cost of owning bullion.

“Until the Fed actually signals accelerated rate policy normalization, gold should maintain its current range of $ 1,850 to $ 1,875 an ounce.”Said Stephen Innes, manager at SPI Asset Management.

“A possible appointment of Lael Brainard as the new chair of the Fed, seen as an official very inclined to ultra-expansionary policy, would likely push gold above the threshold of US $ 1,875”, He estimated.

Meanwhile, spot silver was up 0.2% to $ 25.09 per ounce. Global silver demand could exceed 1 billion ounces for the first time since 2015 this year, the Silver Institute estimated.

For other precious metals, platinum was up 0.8% at $ 1,065.49 an ounce, and palladium was down 0.7% at $ 2,173.70 an ounce.

With information from Reuters