Gold extends gains to one-week high as US yields lose ground
Gold prices rose in European trade on Wednesday against a basket of major rivals, hitting one-week high as the dollar loses ground.
Recent weak US inflation data hurt chances of another US interest rate hike in October.
Gold Prices Today
Gold prices rose 0.5% to $1,972 an ounce, the highest in a week, after rising 0.9% on Tuesday, the largest such profit since November 2.
The Dollar
The dollar index is trading near two-month low at 103.99 against a basket of major rivals, with analysts expecting even more losses to come, in turn boosting gold prices.
US Yields
US 10-year treasury yields tumbled 0.5% today, plumbing two-month lows at 4.428% and boosting non-yielding assets.
Such gains came after US consumer prices showed a sharp slowdown in October, all but confirming the end of the current policy tightening cycle.
US Inflation Data
In the US, consumer prices rose 3.2% y/y in October, slowing down from 3.7% in the previous reading, and below estimates of 3.3%.
Core prices, excluding food and energy, rose 4% y/y, down from 4.1% in the previous reading.
US Rates
Following the data, the odds for a US interest rate hike in December plunged to 1%.
Fresh Data
Now investors await important US retail sales and producer prices data for October later today to gauge the likely path ahead for US policies.
The SPDR
Gold holdings at the SPDR Gold Trust remained flat yesterday at 870.45 tonnes, the highest since October 3.
Gold gains ground as dollar tumbles following inflation data
Gold prices rose on Tuesday as the dollar lost ground against most major rivals following US inflation data.
In the US, consumer prices rose 3.2% y/y in October, slowing down from 3.7% in the previous reading, and below estimates of 3.3%.
Core prices, excluding food and energy, rose 4% y/y, down from 4.1% in the previous reading.
Such data all but guarantees the Federal Reserve will hold interest rates flat, and that the current cycle of policy tightening is likely over.
Otherwise, the dollar index fell 1.5% as of 21:04 GMT to 104.06, with a session-high at 105.7, and a low at 103.9.
Gold spot prices rose 0.9% as of 21:05 GMT, or $17 to $1967.20 an ounce.
Palladium spikes 4% away from five-year nadir
Palladium prices rose on Tuesday as the dollar index fell against a basket of major rivals, with the industrial metal rebounding off five-year lows plumbed last week.
Chinese consumer prices slowed down once again in October, while local demand suffers, in turn hurting prospects of recovery in the world's second largest economy.
The data painted a mixed picture of Chinese economic performance, as exports and manufacturing slowed down in October, while imports unexpectedly grew.
Citibank said in a research paper that China's recovery from the Covid 19 fallout is very gradual amid continued weakness in the real estate sector and damaged confidence.
In the US, consumer prices rose 3.2% y/y in October, slowing down from 3.7% in the previous reading, and below estimates of 3.3%.
Core prices, excluding food and energy, rose 4% y/y, down from 4.1% in the previous reading.
The dollar index fell 1.1% as of 15:51 GMT to 104.5, with a session-high at 105.7, and a low at 104.3.
Palladium futures due in December rose 3.9% to $1,018 an ounce as of 15:52 GMT.
Oil prices extend gains to one-week high on strong global demand
Global oil prices rose on Tuesday on track for the fourth profit in a row, scaling a one-week high after the International Energy Agency raised global demand outlook for this year and the next.
Prices are also boosted by a steep decline by the dollar after weak inflation data for October.
Global Oil Prices
US crude rose 0.5% to $78.88 a barrel, the highest in a week, while Brent added 0.6% to $83.10 a barrel, the highest in a week.
US crude rose 1.5% on Monday, while Brent climbed 1.25%, the third profit in a row away from a four-month trough.
Demand Outlook
The International Energy Agency raised its global demand growth outlook in 2023 to 2.4 million bpd from 2.3 million bpd, and raised the outlook for 2024 to 930 thousand bpd from 880 thousand bpd.
The Dollar
The dollar index fell 0.9% on Tuesday on track for the third loss in a row, plumbing a two-month trough at 104.70 against a basket of major rivals.
A weaker dollar buoys commodities and minerals and makes them cheaper to holders of other currencies.
The decline came following US inflation data for October, which showed consumer prices slowed down last month.
Following the data, the odds for a US interest rate hike in December plunged to 1%.
US Stocks
Later today, initial data on US crude stocks from the American Petroleum Institute will be released, expected to show another buildup.