Bars of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metal refining and production plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. Portal/Alexander Manzyuk/File Photo Acquire LICENSE RIGHTS
- Traders await Thursday’s US PCE data
- Dollar almost at two-month low
- Won gold for the third time in a row
- Silver hits near three-month high
Nov 27 (Portal) – Gold prices hit a more than six-month high on Monday, firming above $2,000 an ounce, as a weaker dollar and expectations of an end to U.S. interest rate hikes boosted demand.
Spot gold rose 0.5% to $2,012.33 an ounce at 1147 GMT, after hitting its highest since May 16 at $2,017.82. U.S. gold futures also rose 0.5% to $2,013.10.
The dollar (.DXY) fell 0.1% against a basket of major currencies, hovering around a more than two-month low hit last week and making gold cheaper for holders of other currencies
“Gold is booming, and the way to really explain it is the fact that it has finally broken well above $2,000,” said Craig Erlam, senior market analyst at OANDA, describing the move as “purely technical” and up last week’s US inflation data and jobs report.
Gold prices are well above their 50-day, 100-day and 200-day moving averages and are about $60 away from the August 2020 all-time high of $2,072.49.
Investors’ attention is on the release of revised U.S. third-quarter GDP numbers on Wednesday and the PCE price index, the Fed’s preferred measure of inflation, on Thursday.
“Economic data coming out of the U.S. this week, both growth and inflation, will determine whether gold stays above $2,000,” said Kyle Rodda, financial markets analyst at Capital.com.
Recent data pointing to a slowdown in US inflation has raised expectations for an earlier-than-expected easing of monetary conditions by the Federal Reserve.
Traders generally expect the Fed to keep rates on hold in December while pricing in about a 60 percent chance of a rate cut in May next year, CME’s FedWatch tool shows.
Lower interest rates reduce the opportunity cost of holding non-interest bearing assets, which often leads to an increase in the price of gold.
Silver rose 1.9% to $24.76 an ounce, platinum rose 0.1% to $931.70 and palladium rose 0.9% to $1,078.56 an ounce.
Reporting by Anushree Mukherjee and Brijesh Patel in Bengaluru; Edited by Kirsten Donovan, Louise Heavens and Barbara Lewis
Our standards: The Trust Principles.
Acquire license rights, opens new tab