Gold rose by almost 1% in Asian trading on Wednesday, boosted by a weakening dollar and weak economic data from the US, which strengthened expectations that the Federal Reserve could cut interest rates as early as December. Demand for safe-haven assets remains high despite the growth of risky markets. This is reported by UNN with reference to Investing.
Details
On Tuesday and Wednesday, gold prices rose after the publication of several weak indicators for September. Retail sales barely changed, and core producer inflation fell more than predicted. This reinforced the signal of a cooling US economy.
This data will be among the last that the Fed will receive before its December meeting. Due to the prolonged government shutdown, the publication of October employment and inflation figures is expected to be delayed. The report on the PCE index, a key inflation indicator for the Fed, has been postponed to December 5.
The probability of a 25 basis point rate cut at the December 9-10 meeting increased to 80.7% – compared to 42.4% last week, according to CME FedWatch data.
Also, the spot price of gold rose by 0.9% – to $4,166.13 per ounce, and February futures added the same amount – to $4,201.15. The weakening dollar made precious metals cheaper for buyers outside the US.
Prices for other precious metals also increased:
- silver – by 1%, to $52.0215 per ounce;
- platinum – by 0.2%, to $1559.90 per ounce.
On the London Metal Exchange, copper futures rose by 0.3% – to $10,992.90 per ton, after Chile's Codelco announced plans to sharply raise prices for Chinese customers.
Lower interest rates typically support gold and other non-yielding assets, reducing the attractiveness of Treasury bonds. The dollar index fell 0.5% from a six-month high reached a week earlier.
Recall
According to fintech expert and co-founder of Concord Fintech Solutions Olena Sosedka, the trend of rising gold prices is reinforced by the unstable geopolitical situation in the world.