* Gold faces strong resistance around $1,870s - analysts
* UK inflation leaps to 10-year high
Nov 17 (Reuters) - Gold prices bounced on Wednesday as inflation worries pushed investors to the safe-haven metal, even as better-than-expected U.S. retail data strengthened the dollar making bullion expensive for holders of other currencies.
Spot gold rose 0.9% to $1,865.66 per ounce by 14:00 ET (1900 GMT), having dropped in the previous two days after a seven-session rally.
U.S. gold futures settled up 0.9% at $1,870.20.
“The underlying support for gold and silver remains the inflationary pressures we continue to see in the market,” said David Meger, director of metals trading at High Ridge Futures.
The U.S. dollar, which also contends with gold as a safe store of value, touched its highest since July 2020, bolstered by better-than-expected U.S. retail data.
If Fed speakers, in the near term, signal asset purchase reductions may be speeded up to fight inflation or if the market believes rates would rise sooner than anticipated, bullion could come under some “light pressure,” Meger said.
Higher interest rates increase the opportunity cost of holding non-interest bearing gold.
The Fed began phasing out its bond-buying this month and expects to end purchases altogether by mid-2022. Its next policy-setting meeting is in mid-December.
Rate hikes remain a potential risk for gold and only a clear break above $1,875 may drive further gains, Carlo Alberto De Casa, external analyst at Kinesis Money said.
Rising prices, driven mostly by soaring energy costs, remain a concern in other economies as well.
British inflation hit a 10-year high, bolstering expectations the Bank of England will raise interest rates in December, while Canada’s annual rate accelerated again in October to match a February 2003 high.
Elsewhere, spot silver jumped 1.1% to $25.06 per ounce, platinum fell 0.1% to $1,060.40, and palladium climbed 1.2% to $2,184.51. (Reporting by Bharat Govind Gautam and Arundhati Sarkar in Bengaluru; Editing by Krishna Chandra Eluri, Ramakrishnan M. and Vinay Dwivedi)
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