Gold hits one-week high on hopes of Fed rate cuts

Gold prices rose to a more than one-week high on Wednesday as the US dollar and Treasury yields weakened after cooler inflation data boosted bets that a US rate cut might come sooner than earlier priced in by investors, reports Reuters.
Spot gold rose 0.4 per cent to $1,970.45 per ounce at 1224 GMT, after earlier touching its highest since November 7. US gold futures also gained 0.4 per cent to $1,974.70.
Market participants are now awaiting US retail sales and producer price figures due at 1330 GMT. Economists polled by Reuters forecast producer prices rose 0.1 per cent last month, compared with a 0.5 per cent increase in September.
"Today's data release could compound the losing streak for the U.S dollar, should the figures fall below expectations. Against this background, risk is on the upside for gold," said ActivTrades senior analyst Ricardo Evangelista.
Data on Tuesday showed that US consumer prices were unchanged in October, with the annual rise in underlying inflation the smallest in two years.
Following the CPI data, the dollar fell to an over two-month low and benchmark U.S. 10-year Treasury yields fell to their lowest level since Sept. 22.
A weaker US currency makes dollar-priced gold less expensive for holders of other currencies.
Investors now see little chance of another rate hike at the Fed's December meeting, while bets on a rate cut in May 2024 firmed to around 50 per cent compared with 34 per cent before the data, according to the CME Group's FedWatch Tool.
Spot silver rose 1.3 per cent to $23.38 per ounce, while platinum firmed 0.6 per cent to $890.21. Palladium was up 1.6 per cent to $1,033.09 per ounce.