NEW YORK: Gold prices extended gains on Thursday after traders added to bets that the Federal Reserve will deliver an interest-rate cut next month following the latest US economic data.
Spot gold was up 0.4% at $2,617.15 per ounce as of 9:45 a.m. ET (1345 GMT) on track to snap a six-session losing streak. US gold futures edged 0.4% higher to $2,635.00.
US consumer prices rose slightly more than expected in September, but the annual increase in inflation was the smallest in more than 3-1/2 years. Another report showed that weekly jobless claims rose to 258,000 for the week ending Oct. 5, versus estimates of 230,000. “The CPI report didn’t bring much of a surprise and the jobs numbers show a trend of weakening, which puts the notion that the track to cut rates, helping gold.
Last few days, saw cooling in gold’s rally, so it is in a good position to go back up,” said Alex Ebkarian, chief operating officer at Allegiance Gold.
Markets now see an 88% likelihood of a 25-basis-point cut from the Fed next month versus 76% before the data, according to the CME FedWatch tool. Zero-yield bullion is a preferred investment amid lower interest rates.
Investors’ focus will shift to US Producer Price Index data on Friday for additional insights on rate cuts.
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