Gold set for first weekly gain in three on Fed pause bets
FUNDAMENTALS
* Spot gold was up 0.2% at $1,984.26 per ounce, as of 0059 GMT, after hitting its highest since Nov. 6 in the last session. U.S. gold futures were steady at $1,987.
* Bullion is up 2.5% so far this week.
* The dollar was on track for a weekly drop, making gold less expensive for buyers holding other currencies, while yields on 10-year Treasury notes hovered near two-month lows.
* The number of Americans filing new claims for unemployment benefits increased more than expected last week, which could help the Fed’s fight against inflation.
* On Tuesday, data showed U.S. headline consumer prices were flat in October, against expectations for a 0.1% rise. Core CPI, at 0.2%, came in below a forecast of 0.3%.
* The slowing jobs market and weaker-than-expected consumer inflation data prompted market participants to revise their forecasts for future Fed action.
* Traders now widely expect the Fed to leave rates unchanged at its Dec. 12-13 policy meeting, according to the CME FedWatch tool.
* Lower interest rates decrease the opportunity cost of holding gold.
* Spot silver rose 0.6% to $23.83 per ounce, while platinum was flat at $892.58. Palladium eased 0.2% to $1,035.77 per ounce.
DATA/EVENTS (GMT) 0700 UK Retail Sales MM Oct 0700 UK Retail Sales Ex-Fuel MM Oct 0700 UK Retail Sales YY Oct 1000 EU HICP Final MM Oct 1000 EU HICP Final YY Oct 1330 US Housing Starts Number Oct 1315 Bank of England interest-rate setter Megan Greene speaks in a panel discussion about the outlook for monetary policy 0830 Keynote speech by ECB President Christine Lagarde at the 33rd Frankfurt European Banking Congress.
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