Gold prices subdued as market eyes upcoming US data

Gold prices were flat on Thursday following the release of the U.S. inflation print, while traders shifted their attention to the upcoming economic data that could impact the Federal Reserve's policy decision.

FUNDAMENTALS

* Spot gold was subdued at $2,511.52 per ounce, as of 0031 GMT. U.S. gold futures edged 0.1% lower to $2,539.20.


* Data on Wednesday showed that the U.S. consumer prices gained 0.2% last month, matching the advance in July.

* U.S. central bankers will likely start long-awaited interest rate cuts next week with a quarter-of-a-percentage-point reduction, as they seek to reduce the odds of a recession even as stubbornly intact underlying price pressures put them off more aggressive action.

* Lower rates reduce the opportunity cost of holding a zero-yield bullion.

* Traders' attention will now turn towards the U.S. Producer Price Index reading and initial jobless claims data, which is due at 1230 GMT.

* Headline PPI month-over-month is expected at 0.1%, while the year-over-year read is expected at 1.8%. This compares to prints of last month's 0.1% and 2.2%, respectively.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.20% to 866.18 tonnes on Wednesday.

* Spot gold may revisit its Sept. 6 high of $2,529 per ounce, as it has briefly pierced above the last barrier of $2,521 towards this high, according to Reuters technical analyst Wang Tao.

* On the geopolitical front, U.N. Palestinian refugee agency UNRWA said six staffers were killed after two airstrikes hit a school in central Gaza on Wednesday, marking what it said was the highest death toll among its staff in a single incident.

* Spot silver was steady at $28.67 per ounce, platinum gained 0.5% to $955.72 and palladium climbed 1.7% to $1,025.37.

DATA/EVENTS (GMT) 1215 EU ECB Refinancing Rate Sept 1215 EU ECB Deposit Rate Sept 1230 US Initial Jobless Clm 7 Sept, w/e 1230 US PPI Machine Manuf'ing Aug