PRECIOUS-Gold edges higher after U.S. inflation data

Reuters

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    * ECB keeps monetary policy unchanged
    * U.S. CPI rises 0.6% in May 
    * Declining auto output limits PGM demand -analyst 

 (Adds comments, updates prices)
    By Nakul Iyer
    June 10 (Reuters) - Gold prices nudged up on Thursday after
data showed U.S. consumer prices increased more than expected
last month but eased fears over the Federal Reserve tapering its
monetary support.     
    Spot gold  XAU=  rose 0.3% to $1,893.75 per ounce by 1:43
p.m EDT (1743 GMT), having earlier hit its lowest level since
June 4 at $1,869.46. 
    U.S. gold futures  GCv1  settled at 1,896.40 an ounce.
    Data showed U.S. consumer prices increased further in May as
continued economic recovery from the pandemic boosted domestic
demand. Weekly jobless claims also dropped to their lowest level
in nearly 15 months.  urn:newsml:reuters.com:*:nL2N2NR2Q5
    "The key takeaway (from the inflation data) is that this
market is firmly believing that the U.S. Federal Reserve is not
going to change stance anytime soon and the (accommodative
policy) playbook for gold remains," said Edward Moya, senior
market analyst at OANDA.
    Some pricing pressures remain for gold, but ultimately the
belief that "runaway" inflation, which could trigger a Fed
policy tightening, is unlikely should keep gold supported, Moya
said. 
    Investors also took stock of the European Central Bank
pledge to maintain a steady flow of stimulus over the summer, at
its policy meeting.  urn:newsml:reuters.com:*:nL5N2NR47O
    "We expect gold prices to move higher in coming weeks, and
inflation expectations will remain a focal point," said Suki
Cooper, an analyst at Standard Chartered, adding that recent
growth in investor appetite has more than offset weak physical
gold demand, particularly from India and China.
    Among other metals, palladium  XPD=  dropped 0.6% to
$2,762.56, while platinum  XPT=  fell 0.4% to $1,145.23.
    "Supply chain disruptions in semi-conductors have definitely
limited new automobile production and thus demand for platinum
and palladium group metals (PGMs)" keeping a lid on their
prices, said Jeffrey Christian, managing partner of CPM Group.
    Platinum and palladium are used as catalysts in vehicles to
reduce emissions. 
    Silver  XAG=  rose 0.5% to $27.88 per ounce.      

 (Reporting by Nakul Iyer in Bengaluru
Editing by Marguerita Choy and Steve Orlofsky)
 ((nakul.iyer@thomsonreuters.com;  Within U.S. +1 646 223 8780,
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