Gold rebounds after dollar rise slowed by US inflation data

By Ashitha Shivaprasad

(Reuters) -Gold resumed its rise on Wednesday, after a sudden pullback linked to the publication of inflation data in the United States, while the dollar fell on a slight cooling in consumer prices.

* By 1814 GMT, spot gold was up 0.8% at $1,852.65 per ounce. US gold futures gained 0.7% to $1,853.70.

* US consumer price gains slowed in April as gasoline eased from record highs, suggesting inflation is likely to have peaked, though it could remain elevated for a while and the Fed raising interest rates to cool demand.

* Helping gold advance, the dollar index, which initially strengthened on the CPI data, was down 0.1%.

* «The market saw the data and went ‘SELL, SELL, SELL,’ but gold bounced back thinking the data is higher than expected, but not horrible,» said Tai Wong, an independent metals trader. In New York.

* «The Fed won’t get any tighter on this report, but it definitely won’t relax either,» he added.

* Although gold is seen as a haven against inflation, rising rates in the United States increase the opportunity cost of holding bullion, while boosting the dollar, the currency in which the metal is priced.

* In other precious metals, spot silver gained 1.6% to $21.58 an ounce; platinum rose 3.7% to $999.33; and palladium was down 1% at $2,044.17.

(Reporting by Ashitha Shivaprasad and Arpan Varghese in Bengaluru; edited in Spanish by Carlos Serrano)