Gold jumps as dollar slips; focus shifts to U.S. inflation data
NEW YORK (Sept 12) Gold jumped 1% on Monday bolstered by a weaker dollar, while investors positioned for key inflation data as they assess the pace of future interest rate hikes by the U.S. central bank.
Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/File Photo
Spot gold rose 0.6% to $1,726.39 per ounce by 1359 GMT, after rising to its highest since Aug. 30 at $1,733.69.
U.S. gold futures gained 0.5% to $1,737.20.
European Central Bank officials have signalled further rate hikes to rein in inflation, which has supported the euro and pressured the U.S. dollar and is in part responsible for some strength in the gold market, said David Meger, director of metals trading at High Ridge Futures.
The dollar index touched its lowest level since Aug. 26, helping gold gain for a second consecutive session by making it more attractive for overseas buyers. [USD/]
ECB policymakers signalled an increasing risk they will have to raise their key interest rate to 2% or more to curb record-high inflation in the euro zone despite a likely recession.
Investors also braced for the U.S. Consumer Price Index, which is due on Tuesday and is expected to show August prices rose at an 8.1% pace over the year, versus an 8.5% print for July. [USCPNY=ECI]
“We may be seeing traders position for a favourable U.S. inflation report tomorrow which could provide a bigger lift again if we see further softening,” Craig Erlam, senior market analyst at OANDA.
Gold is traditionally considered an inflation hedge, but rate hikes translate into a higher opportunity cost for holding bullion, which pays no interest.
BY NOON TODAY, SPOT GOLD SOARED $20 TO $1734 !!!!!!!!! (AND LOOKING MUCH MUCH HIGHER!
REUTERS
