Gold Advances as Softer Core CPI Data Revives Fed Easing Hopes
Gold prices extended gains on Wednesday, as the dollar dipped after U.S. core inflation data came in softer than expected, abating inflation pressures and rekindling expectations that the Federal Reserve's easing cycle may not be over yet.
Spot gold gained 0.6% to $2,693.63 per ounce by 02:23 p.m. ET (1923 GMT). U.S. gold futures settled 1.3% higher at $2,717.80.
Excluding volatile food and energy components, core CPI increased 3.2% on an annual basis, compared with an expected 3.3% rise, the U.S. Bureau of Labor Statistics said on Wednesday.
"Core CPI came in a little bit below expectations. This is a bit of a positive for gold... The corollary to this is that the Fed will not necessarily exclude the possibility of cutting rates," said Bart Melek, head of commodity strategies at TD Securities.
"The probability of a rate cut in January is kind of nothing, but we are pricing some rate cuts by the end of the year here."
Markets now expect the Fed to deliver 40 basis points (bps) worth of rate cuts by year-end, compared with about 31 bps before the inflation data.
Source : Reuters
