Gold about to register largest weekly profit in two years

Gold prices rose in European trade for another session, hitting three-month highs and on track for the largest weekly profit in two years as the dollar tumbles against major rivals. 

The dollar plumbed three-month lows after data that showed a sharp slowdown in US inflation in October, paving the way for less bullish policies by the Federal Reserve in December. 

Prices Today

Gold prices rose 0.55% to $1,764 an ounce, the highest since August 25, after rising  2.9% on Thursday, the largest profit since November 4, after US consumer prices data, while dollar and US treasury yields tumble. 

Weekly Trades

Gold prices are up a solid 5% so far this week, on track for the largest weekly profit since July 2020, and the second such profit in a row. 

The Dollar

The dollar index fell 0.4% for the third straight session, hitting three-month lows at 107.55 against a basket of major rivals. 

Dollar's losses were compounded after US consumer prices data that showed a sharper slowdown than expected in October, in turn paving the way for less aggressive policies by the Fed.

Consumer Prices

US consumer prices rose 7.7% in October y/y, less than the expected 7.9%, and down from 8.2% in the previous reading.

Core prices, excluding food and fuel, rose 6.3%, less than the expected 6.5%, and less than 6.6%5 in the previous reading.

Fed Rates

Bets on a 0.50% rate hike by the Federal Reserve in December rose from 67% to 85%, while bets on a 0.75% rate hike tumbled from 33% to 15%.

The SPDR

Gold holdings at the SPDR Gold Trust rose by 3.19 tones yesterday, the largest such increase since June 17 to a total of 911.57 tones, the highest since November 3.