Investing.com -- Gold future prices edged up on Tuesday posting its fifth consecutive daily gain, as consumer prices in the U.S. for February rebounded from the previous month.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 3.50 or 0.29% to 1,191.20. Gold prices wavered on Tuesday between a high of 1,194.50 in U.S. morning trading and a low of 1,184.70 shortly thereafter.
The Labor Department on Tuesday said its Consumer Price Index (CPI) rose 0.2% for February, one month after declining 0.1%. The slight uptick last month ended a three-month streak of declines. On a year-over-year basis the CPI remained unchanged from its February 2014 level, though analysts had forecasted it to slip by 0.1% from last year's figure. Core CPI, which excludes food and energy costs, moved up by 0.2% increasing at the same rate as it had a month earlier. On a year-over-year basis, however, core CPI is up 1.7% from its level last year at this time.
Following last week's Federal Open Market Committee (FOMC), Fed chair Janet Yellen indicated that the timing of a potential interest rate hike could be "data dependent," hinging on reasonable wage and GDP growth, as well as continued reductions in unemployment. In addition, the Fed wants to see inflation continue to increase toward its target rate of 2%.
Though Yellen indicated that it is likely that the Fed will raise interest rates at some point this year, the hike will not occur until after its next meeting in April at the earliest. The Fed has not raised short-term interest in nearly a decade.
Also on Tuesday, Federal Reserve Bank of St. Louis president James Bullard indicated that the timing is right to raise the Federal Funds Rate above a level near 0%.
"Zero is no longer the appropriate interest rate for the U.S. economy," Bullard said during a panel session at London City Week.
Echoing comments made by Federal Reserve vice chairman Stanley Fischer a day earlier, Bullard indicated that the policy actions from the Fed could be "extremely accommodative," to market conditions and that lift-off could begin with small increases.
In its report released last week, the FOMC forecasted that interest rates could rise over the next several years at a rate slower than had previously been anticipated. The announcement likely drew applause from long-term gold investors. In periods of increasing interest rates, the precious metal struggles to compete with yield bearing assets.
In early trading, gold prices remained relatively unchanged in spite of disappointing data in China. The flash HSBC/Markit Purchasing Manager's Index fell to 49.2 in March, slightly lower than February's figure of 50.7. China is the world's second-largest purchaser of gold behind India.
Elsewhere, silver futures for May delivery inched up 0.077 or 0.46% to 16.968 a troy ounce.
Copper futures for May delivery rose 0.011 or 0.39% to 2.801 a pound. One day earlier, copper reached a three-month high at 2.9145 amid expectations of strong data in China. Copper is used extensively in manufacturing and construction in Asia's largest nation and is extremely susceptible to economic data in China.