PRECIOUS-Gold firms on Fed slowdown hopes; investors assess Poland blast
Recasts, adds comments, details and updates prices
By Brijesh Patel
Nov 16 (Reuters) - Gold prices steadied a three-month peak on Wednesday as signs of cooling U.S. inflation boosted bets for smaller rate hikes, while markets awaited more clarity surrounding reports of Russian missiles killing two people in Poland.
Spot gold XAU= held its ground at $1,776.73 per ounce, as of 0300 GMT, after hitting its highest since Aug. 15 in the previous session.
U.S. gold futures GCv1 rose 0.2% at $1,780 per ounce.
"Gold is still largely pinned on the Fed ... We can see gold is kind of continuing to creep higher since last week's spike, but it hasn't really found tremendous follows through," said DailyFX currency strategist Ilya Spivak.
"Needless to say, wild card factors can exist like some sort of more aggressive and more immediate escalation in Ukraine, you could see gold become reactive."
are investigating the blast that killed two in Poland, but early information suggests it may have been caused by a missile fired from Russia, U.S. President Joe Biden said. Russia denied it was responsible.
Data on Tuesday showed increased less than expected in October, further evidence that inflation was starting to subside.
The data, following last week's smaller-than-expected increase in consumer prices for October, has lifted hopes that the U.S. Federal Reserve could slow its interest rate hikes going forward.
However,said he sees little evidence that aggressive monetary policy tightening is slowing inflation, anticipating that more hikes would be to get inflation down to the Fed's 2% target.
While gold is used as a safe investment during times of political and financial uncertainty, rising interest rates tend to dull bullion's appeal as the metal pays interest.
Elsewhere, spot silver XAG= gained 0.3% to $21.59 per ounce. Platinum XPT= edged 0.1% higher to $1,015.46, while palladium XPD= fell 0.5% to $2,087.06.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips)