WASHINGTON (dpa-AFX) - Gold prices climbed higher on Wednesday, as inflation data that came in line with expectations raised hopes that the Federal Reserve will cut interest rates next week.
Additionally, gold continued to attract safe-haven buying due to persisting concerns about tensions in the Middle East. According to reports, Israeli air attacks across the Gaza Strip killed at least 38 Palestinians today.
The dollar's recovery after a mild setback limited the yellow metal's upside. The dollar index, which stayed firm in the European session, dropped to 106.27 after the inflation data, but recoverd to 106.70 as the day progressed, gaining about 0.3%.
Gold futures for December closed up $36.20 or about 1.34% at $2,733.80 an ounce.
Silver futures for December gained $0.199 or about 0.6% at $32.562 an ounce, extending gains to a fourth straight session.
Copper futures for December dropped to $4.2120 per pound, down $0.0115 or 0.27% from previous close.
The Labor Department said its consumer price index climbed by 0.3% in November after rising by 0.2% for four straight months. The increase matched expectations. The annual rate of growth by consumer prices ticked up to 2.7% in November from 2.6% in October, which was also in line with estimates.
The Labor Department also said core consumer prices in November jumped by 3.3% compared to the same month a year ago, unchanged from October and in line with estimates. The inflation report has increased confidence the Federal Reserve will lower interest rates by another quarter point next week.
CME Group's FedWatch Tool is currently indicating a 96.4% chance the Fed will cut rates by 25 basis points at its December meeting.
The European Central Bank and the Swiss National Bank are scheduled to announce their interest rate decisions on Thursday. Both the banks are expected to lower interest rates.
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