Gold rises as dollar rally hits pause after US inflation data
Gold prices edged higher on Wednesday, steered by speculative buying and a pause in the dollar's rally, even as inflation data showed slower progress on easing price pressures, indicating fewer rate cuts into next year.
Spot gold rose 0.2% to $2,602.89 per ounce by 9:54 a.m. ET (1454 GMT), rebounding from a two-month low reached on Tuesday. U.S. gold futures gained 0.1% to $2,608.80.
U.S. consumer prices increased as expected in October. Progress towards lower inflation has slowed since mid-year, which could result in fewer interest-rate cuts from the Federal Reserve next year.
"The market had become quite oversold as a result of the post-election sell-off. So I think that there's been some profit-taking and perhaps some speculative buying at these levels," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
"The pullback in the dollar is helping gold at this point. It seems that inverse correlation has sort of re-exerted itself post-election."
The U.S. dollar (.DXY), opens new tab lost 0.1%, holding below its recent 6-1/2-month peak against other major currencies, while Bitcoin paused its record-breaking rally after reaching an all-time high of $89,998 on Tuesday.
Investors believe Trump's presidency might cause the Fed to pause its easing cycle if inflation takes off after expected new tariffs.
The Fed cut interest rates by a quarter of a percentage point last week. Traders now assign a 79% probability to a 25-basis-point cut in December, up from 59% before the CPI data.
Source: Reuters
