Gold prices rose in European trade on Thursday for the third session in a row amid support from the dollar against a basket of major rivals, following weak US data and the release of Fed's minutes. 

It's clear that Fed members are preparing for a slower pace of rate hikes, paving the way for a 0.5% rate hike in December. 

Gold Prices Today

Gold prices rose 0.5% to $1,758 an ounce, after rising 0.5% yesterday, the second profit in a row, moving away from two-week lows at $1,723 an ounce. 

The Dollar

The dollar index fell 0.4% on Thursday for the third straight session, moving towards three-month lows at 105.3 against a basket of major rivals. 

Weak Data

Recent US data showed industrial activities slowed down sharply for the first time in 2-1/5 years as increased interest rates hampered new orders. 

The data overall showed a decline in services and industrial activities in November for the fifth month in a row, a sign of recession. 

The Fed

Fed's minutes yesterday showed US policymakers are content about the slowdown in inflation, and are moving toward smaller rate hikes.

Fed Rates

Chances of a 0.5% rate hike rose from 75% to 85%, while chances of 75% rate hike fell from 25% to 15%.

The SPDR 

Gold holdings at the SPDR Gold Trust remained flat yesterday at 906.93 tones, the highest since November 14. 

German IFO business Climate index rose to 86.3 in November from 84.3 in the previous reading, beating estimates of 85. 

Euro rose in European trade against a basket of major rivals for the third straight session against dollar, almost hitting four-month highs amid fading concerns about the widening policy gap between the US and Europe. 

The dollar fell to near three-month lows under pressure from Fed's minutes, which bolstered the case for a 0.5% rate hike in December. 

EUR/USD rose 0.5% to 1.0448, after closing  up 0.9% yesterday, the second profit in a row, as risk appetite improved. 

Four-Month Peak

Euro hit four-month highs at 1.0481 on November 15 before entering a descending wave on profit-taking. 

Current gains amid fading concerns about the policy gaps between the US and Europe, with the ECB expected to increase interest rates by 75 basis points in December. 

It's now also widely expected the Fed will increase rates by only 0.5% next month instead of 0.75%. 

The Dollar

The dollar index fell 0.4% on Thursday, sharpening losses for the third day in a row, and hitting three-month lows at 105.34 against a basket of major rivals. 

Fed's minutes yesterday showed US policymakers are content about the slowdown in inflation, and are moving toward smaller rate hikes. 

The Energy Information Administration reported a tumble in US crude stocks by 3.7 million barrels to 431.7 million barrels, while analysts expected a drop of 2.5 milllion barrels. 

Gasoline stocks rose 3.1 million barrels to 211 million barrels, while distillate stocks rose 1.7 million barrels to 109.1 million barrels.