WASHINGTON (dpa-AFX) - Gold extended its recent rising streak to the third day amidst softer-than-expected PCE inflation readings from the U.S. that reduced expectations of an immediate rate hike by the Federal Reserve. The decline in bond yields that followed has lifted gold higher from the levels recorded on Wednesday.
With the CME FedWatch tool showing the likelihood of a Fed rate hike in late October falling to around 36 percent, sentiment towards the yellow metal has improved further. A decline in general interest rates bodes well for gold as it reduces the opportunity cost of holding gold, an asset that does not command any interest yield. Ten-year bond yields in the U.S. have declined more than a half a percent. Bond yields have eased considerably in Europe as well.
Gold maintained its positive trajectory despite the dollar's rally on Thursday. The six-currency Dollar Index which measures the Dollar's strength against a basket of 6 currencies has rallied 0.27 percent overnight to 101.73.
Gold Futures for December settlement are currently trading at $4,214.87, jumping 0.67 percent from the previous close of $4,186.70. The day's trading ranged between $4,169.75 and $4,222.62. Prices had ranged between $3,842.80 and $5,626.80 during the past 52-weeks.
Despite the day's surge, gold futures are saddled with weekly losses of 1.96 percent and monthly losses of 4.55 percent. On a year-to-date basis, the loss is 3.9 percent. The yellow metal's price gain over the 3-year horizon however stands at more than 129 percent.
Spot Gold is currently trading 0.64 percent higher on an overnight basis at $4,183.65 per troy ounce. While the day's trading ranged between $4,139.43 and $4,192.99, the 52-week trading ranged between $3,819.51 and $5,595.46.
At current prices, Gold Futures and Spot Gold have both gained more than 8 percent over the past year.
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