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Gold rose more than 1 percent on Thursday rebounding from a one-week low hit in the previous session as the US dollar eased according to Reuters. Investors were assessing the likelihood of a Federal Reserve interest rate increase this month after a hot inflation report released the day before. The precious metal had dropped to its lowest level since October 7 on Wednesday before recovering ground.
Spot gold was up 1.3 percent at $4,158.63 per ounce as of 0257 GMT Reuters figures show. US gold futures for December delivery rose 1.8 percent to $4,180 per ounce. This recovery reversed part of the selling that followed the previous day’s economic data.
The dollar slipped after scaling an 18-month peak overnight a Reuters report noted. A softer dollar makes greenback-priced bullion more affordable for buyers overseas. Such currency movements frequently provide support to gold in global trading.
Kyle Rodda senior financial market analyst at Capital.com said the price action reflected uncertainty about US interest rate policy. “What we’re seeing here is just the symptoms of a market uncertain about US interest rate policy and that is resulting in a bit of volatility” he said. Rodda added that traders were watching a critical level for gold just below $4,000 where strong data could prompt views of urgent Federal Reserve action.
US consumer prices accelerated in September as the cost of gasoline surged data from the Bureau of Labor Statistics showed. Traders are pricing in about a 27 percent chance of a rate hike later this month compared with 22 percent before the data according to CME’s FedWatch Tool. San Francisco Fed President Mary Daly said the US central bank will probably need to increase short-term interest rates further though she signaled no need for a hike at the October 27-28 meeting.
Among other precious metals spot silver gained 1.1 percent to $56.26 per ounce according to Emirates News Agency. Platinum rose 0.3 percent to $1,611.15 per ounce and palladium climbed 1.3 percent to $1,107.83. These increases reflected similar support from the dollar’s retreat across the sector.
