LONDON: Gold steadied above an earlier two-week low on Thursday as the dollar softened despite strong US consumer inflation data, which could allow further interest rate increases from the Federal Reserve.

The US currency was down 0.2 per cent against a basket of currencies, having posted its biggest one-day rise in six weeks on Wednesday.

The dollar was weaker even though data showed US consumer prices accelerated in August amid a jump in the cost of gasoline and rental accommodation, signs of firming inflation that could allow further monetary policy tightening.

Spot gold was up 0.2 per cent at $1,324.86 an ounce at 1340GMT, above an earlier low of $1,315.71, its weakest since Aug 31. US gold futures for December delivery added 0.02 per cent to $1,328.20. With short positioning in the dollar near record levels, any signs that US inflation is picking up could support the case for another rate increase and send the US currency significantly higher, analysts said.

Published in Dawn, September 15th, 2017