PRECIOUS-Gold holds steady as focus shifts to U.S. inflation data
Adds comments, updates prices
By Shreyansi Singh
May 11 (Reuters) - Gold prices held steady on Tuesday as investors awaited U.S. consumer price data due later this week to measure whether inflationary pressure is building, with a weaker dollar and a pullback in Treasury yields supporting the metal.
Spot gold XAU= was unchanged at $1,835.41 per ounce by 0341 GMT, after hitting its highest since Feb. 11 at $1,845.06 on Monday.
U.S. gold futures GCv1 were little changed at $1,836.90 per ounce.
"Although gold extended higher earlier today, it's struggling to continue building momentum and part of that is concern about inflation… it isn't a given that those job numbers mean that the Fed won't act," DailyFX currency strategist Ilya Spivak said.
There is significant resistance for gold within the $1,855-$1,875 area, while support is around the $1,800 level, Spivak said.
Benchmark U.S. 10-year Treasury yields US10YT=RR were pinned below 1.6%, reducing the opportunity cost of holding non-yielding gold. US/
Making gold less expensive for other currency holders, the dollar index .DXY hovered close to a more than two-month low hit in the previous session after U.S. non-farm payrolls data on Friday showed jobs growth unexpectedly slowed in April. USD/ nL1N2MT2XD
Bank of Japan policymakers warned of risks to the country's economic recovery as pandemic curbs weighed on service consumption. nL4N2MY02R
Investors are waiting for the U.S. consumer price index report due on Wednesday to gauge inflationary pressure and the Federal reserve's policy stance.
Fed officials would like to see higher inflation, more wage growth and several months of strong employment gains before they consider adjusting monetary policy, Chicago Fed Bank President Charles Evans said on Monday. nN9N2JM007
"The scope for further declines (in gold prices) may be modest," HSBC analysts said in a note, adding that a decline in yields offers gold a chance to rally.
Palladium XPD= was little changed at $2,959.54 per ounce, silver XAG= was steady at $27.30, while platinum XPT= was down 0.1% to $1,245.68.
(Reporting by Shreyansi Singh in Bengaluru; Editing by Subhranshu Sahu)