PRECIOUS-Gold prices flat as US inflation data takes center stage
Recasts as of 0904 GMT
By Daksh Grover
Dec 11 (Reuters) - Gold prices traded mostly flat on Wednesday as investors looked forward to a critical U.S. inflation print that could influence chances of a widely expected Federal Reserve's interest rate cut next week and offer more cues on their 2025 outlook.
Spot gold XAU= held its ground at $2,689.42 per ounce, as of 0904 GMT, having hit its highest since Nov. 25 earlier in the session. U.S. gold futures GCv1 rose 0.3% to $2,725.50.
Markets are focused on upcoming inflation numbers, with a 25-basis-point Fed rate cut next week already priced in, said StoneX analyst Rhona O'Connell, adding that attention will be on Chair Powell’s post-meeting commentary next week for further policy insights.
The U.S. Consumer Price Index (CPI) data is due at 1330 GMT, with the core CPI projected to have risen 0.3% on a month-on-month basis and 3.3% annually.
"An expected (CPI) number pretty much gives the Fed green light to cut (interest rates) next week and that might be the catalyst we need to see for gold," said Kyle Rodda, financial market analyst at Capital.com.
According to the CME Group's FedWatch Tool, markets are pricing an 86.1% chance of a quarter-point rate cut next week.
Goldman Sachs flagged fewer Fed rate cuts as the main downside risk to its 2025 year-end gold forecast of $3,000 per ounce, rather than a stronger dollar.
"Gold would rise to just $2,890/toz if the Fed cuts only one more time."
Bullion tends to benefit from lower interest rates and thrives during economic and geopolitical turmoil.
Gold has been stagnant but is showing signs of revival, with a recent rally driven by Syria's regime change and reports of China resuming gold purchases, pushing prices to the upper end of their range without breaking higher, O'Connell added.
Spot silver XAG= shed 0.6% to $31.71 per ounce, platinum XPT= dropped 1.4% to $929.00 and palladium XPD= shed fell 0.57% to $962.44.
(Reporting by Daksh Grover and Rahul Paswan in Bengaluru; Additional reporting by Swati Verma; Editing by Janane Venkatraman )
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