WASHINGTON (dpa-AFX) - Gold prices rallied on Monday amidst expectation of an easing in inflation that would goad the Fed to a cut in interest rates. Safe haven demand amidst the geopolitical tensions in the Middle East also supported prices.
Inflation updates for July due from the U.S. on Wednesday are expected to show headline annual inflation declining to 2.9 percent from 3 percent in June. The core component thereof is seen falling to 3.2 percent from 3.3 percent previously. Month-on-month inflation as well as its core component are both seen at 0.2 percent.
The CME FedWatch tool reveals that markets overwhelmingly expect a Fed rate cut in September, with a 51.5 percent probability for a 25 basis points cut and a 48.5 percent probability for a rate cut of 50 basis points.
Amidst the firm rate cut expectations, Gold Futures for December settlement has gained 0.86 percent to trade at $2,494.60, versus the previous close of $2,473.40. Prices had surged 0.41 percent on Friday and 1.27 percent on Thursday.
The day's trading range has been between $2,462.65 and $2,497.15 as compared with the 52-week trading that ranged between $1,823.50 and $2,522.50.
Spot Gold rallied 0.91 percent to trade at $2,453.27 per troy ounce. Prices had surged 0.17 percent on Friday and 1.90 percent on Thursday.
The day's trading range has been between $2,423.9 and $2,457.57. Spot Gold had ranged between $1810.1 and $2483.78 over the past 52 weeks.
At current prices, both Spot Gold and Gold Futures have gained more than 26 percent over the past year.
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