Gold rises over 1% as softer oil prices ease inflation worries
GLD•Spot gold rose 1.2% to $4,112.90 per ounce as softer oil prices eased inflation concerns. Investors awaited US inflation data and fresh signals on the Federal Reserve’s policy outlook.
1. Gold gains as oil falls
Spot gold climbed 1.2% to $4,112.90 per ounce by 0630 GMT, while US gold futures for December delivery also rose 1.2% to $4,122.00. Bullion gained about 5% last week. Oil prices fell after Donald Trump said he was highly unlikely to order further attacks on Iran as talks to end the conflict continued.
2. Rate outlook in focus
Lower oil prices can ease inflationary pressures and reduce expectations that interest rates will stay higher for longer, lowering the opportunity cost of holding non-yielding bullion. The dollar softened, making gold priced in dollars more affordable for overseas buyers. US job growth accelerated in October and unemployment fell to 4.1%, while traders saw a 79% chance of a December Fed rate increase, up from 71% before the payrolls data.
3. Inflation data ahead
Investors awaited US Consumer Price Index data due Tuesday and Producer Price Index data due Friday. Tim Waterer of KCM Trade said hotter-than-expected readings would likely strengthen the dollar and raise the odds of a December rate hike, putting gold under pressure. Silver rose 1.4% to $52.57 per ounce, platinum gained 0.7% to $1,546.83 and palladium rose 1.4% to $1,037.58.
