Gold Gains on Softer Dollar; Focus on US Inflation Data

SEATTLE (Scrap Monster):  Gold prices rose on Wednesday as the U.S. dollar eased, while investor focus shifted to key inflation data from the world's biggest economy for cues on the likely scale of a Federal Reserve rate cut next month.

Spot gold was up 0.6% to $2,646.48 per ounce as of 0745 GMT, after hitting a more than one-week low on Tuesday.

U.S. gold futures rose nearly 1% to $2,647.00.

The dollar index was down 0.3%, boosting gold's appeal for holders of other currencies.

"Gold has been fluctuating alongside dollar volatility ... Until we get more U.S. economic data, the story remains about Federal Reserve policy, tariffs, and their impact on the dollar," said Kyle Rodda, financial market analyst at Capital.com.

"In the long run, I think Trump's trade war may be positive for gold because of higher debt loads and a touch of dedollarisation," Rodda said.

Investors digested a handful of data on Tuesday, which indicated that the economy remained on solid footing.

 Traders will now closely monitor core PCE figures, initial jobless claims and GDP (first revision), all due later in the day.

Markets currently see a 63% chance of a quarter-point rate cut by the Fed in December, as per the CME group's FedWatch tool.

Trump's appointments and policies that pressure the Fed, increase deficits, escalate tariffs, or raise concerns about U.S. financial sustainability could collectively support gold prices, said Daan Struyven, co-head of global commodities research at Goldman Sachs.

 Elsewhere, China's net gold imports via Hong Kong in October fell 4.6% from September and were down 43% from the previous year, data showed.

On the geopolitical front, U.S.-France brokered ceasefire between Israel and Iran-backed group Hezbollah took effect at 0200 GMT on Wednesday.

Spot silver rose 0.8% to $30.65 per ounce, platinum added 0.6% to $933.43 and palladium was up 1.5% to $991.50.

 Courtesy: www.reuters.com