Gold hits 6-month peak on dollar dip, bets of Fed’s rate-hike pause

Gold prices climbed to a six-month peak on Tuesday, buoyed by expectations that an end to the U.S. Federal Reserve’s interest rate hike cycle would keep the dollar and yields under check.

FUNDAMENTALS

* Spot gold rose 0.1% to $2,015.65 per ounce by 0243 GMT.

* U.S. gold futures for December delivery rose 0.2% to $2,016.10 per ounce.

* The dollar index touched a near three-month low, against its rivals, making gold less expensive for other currency holders.

* Yields on 10-year Treasury notes hovered near two-month lows of 4.3630%.

* Recent data showing signs of slowing inflation in the U.S. has boosted expectations that the Fed could begin easing monetary conditions sooner than expected, with the market now awaiting PCE data – Fed’s preferred inflation gauge – on Thursday.
* Traders widely expect the U.S. central bank to hold rates in December, while pricing in about a 50-50 chance of easing in May next year, CME’s FedWatch Tool shows.
* Lower interest rates reduce the opportunity cost of holding non-interest-bearing bullion

* Top consumer China’s net gold imports via Hong Kong fell for a second consecutive month in October as a patchy economic recovery weighed on demand in the key bullion market, data on Monday showed.

* Meanwhile, an Israel-Hamas truce in the Gaza Strip stretched into a fifth day as the two sides completed the release of Israeli hostages and detained Palestinians under their original ceasefire deal and appeared poised to free more.

* Spot silver gained 0.1% to $24.65 per ounce, platinum was up 0.1% to $919.70. Palladium rose 0.1% to $1,068.94 per ounce. DATA/EVENTS (GMT) 0700 Germany Gfk Consumer Sentiment Dec 0900 EU Money-M3 Annual Growth Oct 1200 Brazil IPCA-15 Mid-Month CPI Nov 1400 US Monthly Home Price Index Sep 1500 US Consumer Confidence Nov 1500 US Fed Gov. Christopher Waller speaks — 1545 US Fed Gov. Michelle Bowman speaks — 1730 Brazil Central Govt Balance Oct 2100 S. Korea BOK Manufacturing BSI Dec