Gold rose nearly 1 per cent on Wednesday,
supported by reduced bets on Federal Reserve tightening next
month as investors awaited key U.S. inflation data that could
reshape policy expectations.
Spot gold gained 0.9 per cent to $4,406.34 per ounce by 0330
GMT. U.S. gold futures for December delivery rose 0.6 per cent
to $4,466.70.
Bullion climbed to a 10-week high on Tuesday before hitting
technical resistance at the 100-day moving average around $4,387
and closing lower for the second time this month.
“The primary driver for gold is the reduction in pricing of
rate hikes by the Fed,” said Kelvin Wong, a senior market
analyst at OANDA.
“In terms of technical positioning, we started to see a
bullish break late last week above that $4,200 level, which also
created a positive momentum feedback loop.”
Bullion posted its largest weekly gain since January on
Friday after weaker-than-expected jobs data led traders to scale
back bets on U.S. rate hikes.
Traders are now pricing in a 50 per cent chance of a hike in
September, down from 60 per cent before the jobs report, according to
the CME FedWatch Tool.
Lower interest rates tend to support gold as bullion pays no
interest.
The U.S. Consumer Price Index data due later in the day
could reshape the interest rate outlook. Fed Bank of Chicago
President Austan Goolsbee said he is more concerned about
too-high inflation than about any labour market weakness.
Oil extended gains as the U.S. and Yemen’s Iran-aligned
Houthis reported separate attacks on shipping on Tuesday, while
prospects for ending the Iran war appeared to dim, with Tehran
saying the Strait of Hormuz would remain closed unless
Washington accepts its conditions.
Spot silver was up 1.2 per cent at $65.46 per ounce, trading
below its highest level since June 22 hit on Tuesday.
Platinum rose 0.6 per cent to $1,754.10 and palladium
gained 0.8 per cent to $1,370.86.