Gold price prepares for its best week in more than two years

Gold prices were headed for their best week in more than two years, extending gains on Friday on hopes the Federal Reserve would loosen policy amid signs of cooling inflation.

At 09:16 GMT, spot gold was up 0.4% at $1,762.19 an ounce, after gaining more than 2% on Thursday on news that US consumer prices rose less than expected in October. . US gold futures were up 0.7% at $1,765.40.

“Yesterday’s weaker-than-expected CPI figure has changed the narrative when it comes to yields, along with the notable turnaround we’ve seen in recent Fed spokespeople.said Michael Hewson of CMC Markets UK.

Gold prices are up nearly 5% so far this week and traders now see a 71.5% chance of a 50 basis point interest rate hike at the Fed’s December meeting.

Higher rates increase the opportunity cost of holding bullion, which does not bear interest, so expectations of a lower rate increase boost sentiment.

“Coupled with a technical break above the October highs, the likelihood of gold hitting $1,800 has become much more likely.Hewson said, adding that trading is likely to remain choppy and the dollar will weaken further from here.

The dollar index extended its decline, falling to its lowest level in nearly three months, making gold more attractive to foreign buyers. The yield on 10-year US Treasury bills fell to its lowest level in a month on Thursday. Gold prices and yields move in opposite directions.

In other precious metals, spot silver was up 0.6% at $21.79 an ounce, on track for its second consecutive weekly advance; platinum rose 2.2% to $1,054.38, heading for its biggest weekly advance since February 2021; and palladium improved 2.98% to $2,023.13.

With information from Reuters