GOLD prices edged higher on Friday (Oct 11) after recent data supported bets for a US Federal Reserve interest rate cut next month, while market participants focussed on the US Producer Price Index report for further direction.
Spot gold rose 0.3 per cent to US$2,636.13 per ounce by 0153 GMT but was down about 0.6 per cent for the week. US gold futures rose 0.5 per cent to US$2,653.40.
The US dollar index fell from two-month highs. A weaker US dollar makes bullion more attractive for other currency holders.
Data on Thursday showed that US consumer prices rose slightly more than expected in September, while jobless claims increased to 258,000 in the week ended Oct 5, versus estimates of 230,000. All eyes are now on the PPI data due at 1230 GMT.
Markets currently see an 83 per cent chance of a 25-basis-point rate reduction in November and a 17 per cent probability that the Fed will keep rates on hold, according to CME’s FedWatch.
Lower interest rates reduce the opportunity cost of holding bullion.
New York Fed president John Williams said the timing and pace of rate cuts will depend on data, but “based on my current forecast for the economy, I expect that it will be appropriate to continue the process of moving the stance of monetary policy to a more neutral setting over time”.
Elsewhere, Gulf states are lobbying Washington to stop Israel from attacking Iran’s oil sites because they are concerned their own oil facilities could come under fire from Tehran’s proxies if the conflict escalates, three Gulf sources said.
Spot silver edged 0.1 per cent higher to US$31.21 per ounce. Platinum climbed 0.7 per cent to US$974.20, while palladium inched up 0.8 per cent to US$1,077.70. REUTERS
