Gold gains as dollar retreats ahead of Fed's inflation gauge
Shafaq News/Gold extended gains on Friday, as the U.S. dollar pulled back from two-monthhighs on heightened expectations for a Federal Reserve rate cut in Novemberwith investors looking forward to the central bank's key inflation gauge forfurther direction.
Spot goldrose 0.3% to $2,637.31 per ounce by 0930 GMT. U.S. gold futures gained 0.6% to$2,654.30.
The U.S.Producer Price Index data and speeches from several Fed officials are expectedlater in the day.
"Afterstronger-than-expected U.S. jobs data and higher-than-expected inflation data,the market is a bit split on how many rate cuts we will see from the Fed overthe coming months," UBS analyst Giovanni Staunovo said.
Data onThursday showed U.S. consumer prices rose slightly more than expected inSeptember, but the annual increase in inflation was the smallest in more than3-1/2 years.
Slowlycooling inflation and a U.S. job market that remains strong but at the risk ofdeteriorating give a green light for more interest-rate cuts in coming months,Fed policymakers indicated on Thursday.
The CMEFedWatch tool, opens new tab shows markets currently see an 84.4% chance of a25-basis-point rate reduction in November and a 15.6% probability of the Fedkeeping rates on hold.
"Goldprices are likely to stay volatile in the short term, but we look for higherprices as we look for further rate cuts by the Fed," Staunovo said.
Gold is ontrack for its second straight week of declines after prices retreated from arecord high of $2,685.42 hit last month.
Physicalgold dealers in India charged premiums for the first time in two months thisweek as the upcoming festival season attracted some jewellery buying.
(Reuters)
