WASHINGTON (dpa-AFX) - Gold extended gains on Wednesday amidst a drastic repricing of Fed rate hike expectations. A weaker-than-expected labor market data from the U.S. as well as dovish comments from a Federal Reserve official helped gold regain glitter. Anxiety ahead of the release of the Fed's preferred PCE-based inflation readings on Wednesday morning however limited gains.
Data released by the U.S. Bureau of Labor Statistics on Tuesday morning showed the number of job openings falling to 7.08 million in August compared to an upwardly revised 7.34 million in July. The lowest reading in five months also missed forecasts of 7.23 million. The data update caused markets to tone down expectations of another rate hike by the Federal Reserve in late October.
Dovish comments from the President of the Federal Reserve Bank of New York also supported a downward repricing of rate hike expectations. His comments that there was no need to rush with another rate increase quelled rate hike projections.
With the CME FedWatch tool showing the likelihood of a Fed rate hike in late October at less than 45 percent, from around 50 percent a day earlier and around 70 percent a week earlier, sentiment towards the yellow metal recorded a strong surge.
Gold also got a boost with the Dollar's retreat and the easing in global bond yields. The six-currency Dollar Index which measures the Dollar's strength against a basket of 6 currencies has declined 0.11 percent overnight to 101.26.
Gold Futures for December settlement are currently trading at $4,221.70, jumping 1 percent from the previous close of $4,179.70. The day's trading ranged between $4,197.95 and $4,233.97. Prices had ranged between $3,842.80 and $5,626.80 during the past 52-weeks.
Amidst the day's surge, gold futures are saddled with weekly losses of 2.2 percent and monthly losses of 5.8 percent. On a year-to-date basis, the loss is 3.8 percent. The yellow metal's price gain over the 3-year horizon however stands at more than 125 percent.
Spot Gold is currently trading 0.23 percent higher on an overnight basis at $4,192.25 per troy ounce. While the day's trading ranged between $4,165.80 and $4,202.29, the 52-week trading ranged between $3,819.51 and $5,595.46.
At current prices, Gold Futures and Spot Gold have both gained around 8.5 percent over the past year.
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