U.S. CPI data due at 1330 GMT
Benchmark 10year U.S. Treasury yields off Nov 2019 highs

Feb 10 Reuters Gold prices were stuck in a tight range on Thursday as investors cautiously awaited U.S. inflation data that could offer fresh clues about the pace of the Federal Reserve39;s monetary policy tightening.

Spot gold was steady at 1,832.79 per ounce by 0820 GMT, trading close to Wednesday39;s high of 1,835.60. U.S. gold futures fell 0.2 to 1,833.80.

I think the dollar is going to weaken off despite yields going higher because every other central bank is raising interest rates … to defend against inflation, said Stephen Innes, managing partner at SPI Asset Management.

If the Fed starts ramping up rates too quickly, it39;s not good for the economy, especially with every other central bank doing the same thing in unison. In that sense, gold could actually be a pretty decent hedge over the long term.

The U.S. consumer price index for January, expected later in the day, is likely to have risen 7.3 annually, which would be the largest such increase since 1982.

A robust inflation reading is expected to burnish gold39;s appeal as an inflation hedge, but interest rate hikes would raise the opportunity cost of holding nonyielding bullion.

If we look at the 10year and 2year bond yields, the spread is narrowing slowly people are not expecting growth in a longer time, said Jigar Trivedi, a commodities analyst at Mumbaibased broker Anand Rathi Shares. 

That39;s why the…