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Gold at six-month high on weaker dollar, rate pause bets


Spot gold was 0.4 per cent higher at $2,009.69 per ounce, and U.S. gold futures increased 0.3 per cent to $2,009.50

Gold prices climbed a six-month peak on Monday, supported by a weaker U.S. dollar and on speculations that the U.S. Fed is done with its interest rate hike cycle, while the focus shifted to U.S. inflation figures due later this week.

Spot gold was 0.4 per cent higher at $2,009.69 per ounce by 0404 GMT. U.S. gold futures increased 0.3 per cent to $2,009.50.

What’s moving gold at the moment is the lower U.S. dollar because of the recent soft data, said Kyle Rodda, a financial market analyst at

Economic figures coming out of the U.S. this week, both on the growth and inflation front, will make or break a case for whether gold stays above $2,000, Rodda added.

Gold gained sharply earlier in the session, reaching $2,017.82 an ounce.

However, “it might have been just characteristic of a sort of thinner Asian market,” Rodda said.

The dollar index edged down 0.1 per cent against its peers, not far from a more than 2-month low level hit last week, making gold less expensive for other currency holders.

Market focus now shifts to the revised U.S. Q3 GDP figures due on Wednesday and the U.S. PCE price index – Fed’s preferred inflation gauge – on Thursday.

Earlier this month, another inflation data showed weaker-than-expected consumer inflation, raising hopes that the Federal Reserve could begin easing monetary conditions sooner than expected.

Traders widely expect the Fed to leave rates unchanged in December, while pricing in around a 60 per cent possibility of a rate cut in May 2024, according to CME’s FedWatch Tool.

Lower interest rates reduce the opportunity cost of holding non-interest-bearing gold.

In the meantime, Japan’s October services PPI (Producer Price Index) came in at 2.3 per cent, up from a revised 2 per cent in September, adding to the belief that the BoJ will end negative rates next year.

Spot silver advanced 1.3 per cent to $24.61 per ounce, platinum dropped 0.3 per cent to $927.48. Palladium added 0.1 per cent to $1,069.85 per ounce.

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