Gold advanced to the highest in two weeks as a weakening dollar attracted buyers in exchange-traded funds backed by the metal amid mounting speculation that U.S. interest-rate increases will be gradual.
The Bloomberg Dollar Spot Index fell for a third day, the longest losing streak in three weeks, a day after a report showed a core U.S. inflation gauge rose less than estimated in September. That bolstered speculation the Federal Reserve won’t move aggressively in raising borrowing costs.
Gold prices ended the U.S. day session moderately firmer and scored a two-week high Wednesday. Some chart-based buying was featured after prices scored an upside “breakout” from a near-term trading range on the daily chart. Higher crude oil prices were also bullish for the precious metals today. December Comex gold was last up $7.40 an ounce at $1,270.30. December Comex silver was last up $0.017 at $17.655 an ounce.
The highlight of the marketplace Wednesday was some mostly upbeat economic data coming out of China, which was also friendly for the precious metals. China is a major importer of commodities, including metals. China’s economy grew by 6.7% in the third quarter, year-on-year, which was in line with market expectations.
The World Gold Council said Wednesday that the recent decline in gold prices should spur more demand for physical gold from China.
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