Gold climbs to near two-week high as dollar dips

Economies.com
2022-11-29 09:04AM UTC

Gold prices rose in European trade on Tuesday, resuming the gains and almost touching two-week high as the dollar declined against a basket of major rivals. 

 

Investors await some new data to shed light on the Fed's upcoming December meeting and its rate decisions, with most analysts now expecting a 50 basis points hike. 

 

Gold Prices

 

Gold prices rose 1.1% to $1,759 an ounce, after closing down 0.8% yesterday, the first loss in five days on profit-taking away from two-week highs at $1,763. 

 

Gold lost ground on Monday after bullish remarks by some Fed officials, which once again raised chances of a 0.75% rate hike by the Fed in December. 

 

Fed Statements 

 

Fed Saint Louis President James Bullard said the ECB needs to raise interest rates by a bit more, while New York Fed President John Williams said the Fed needs to carry on its path of rate hikes.

 

Fed Rates

 

Such statements changed market bets on a 0.5% rate hike in December from 75% to  70%, while chanced of a 0.75% rate hike rose from 25% to 30%. 

 

The Dollar

 

The dollar index fell 0.6% on Tuesday, resuming losses after a two-day advance from three-month lows back then at 105.22 against a basket of major rivals.

 

The dollar fell today as risk appetite improved in the markets, while Asian stocks advanced, led by Chinese stocks, hurting demand on safe haven.

 

Investors now mostly expect Chinese authorities to control ongoing protests and alleviate some of the strict Covid 19 restrictions. 

 

Data 

 

Investors await a batch of important data later today, like the payrolls report for November, in addition to Fed Chair Jerome Powell's speech on Wednesday on the economy and inflation. 

 

The SPDR

 

Gold holdings at the SPDR Gold Trust fell 0.87 tones yesterday to a total of 908.09 tones. 

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