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Gold rally pauses as focus shifts to United States economic data

Gold relieved on Wednesday, taking a. breather after rallying in the last session on an escalation in. the Middle East conflict, while traders waited for more hints on. U.S. rates of interest.

Spot gold was down 0.4% at $2,652.62 per ounce by. 0943 GMT, after jumping more than 1% on Tuesday after Iran. released rocket strikes on Israel.

U.S. gold futures reduced 0.6% to $2,673.90.

Checking gold's run was strength in the competing safe-haven. dollar.

Gold is simply seeing some short-term pressure due to a. stronger dollar but the environment stays exceptionally favourable. for gold, said Kinesis Cash market analyst Carlo Alberto De. Casa.

Gold was still within sight of recent highs on worries of. even more escalation in the Middle East, including retaliation by. Israel.

Longer term, the outlook genuine rate of interest is going to. drive gold, Daniel Hynes, senior ANZ products strategist said. in a note.

Bullion's 28% rally so far this year has been driven in part. by the Fed's monetary alleviating, which boosts relative appeal for. zero-yield gold.

Traders see a 37% possibility of a 50 bps cut from the Fed in. November.

They will keep a close eye on data, including U.S. ADP. work figures later on in the day and Friday's nonfarm. payrolls, while also scanning commentary from Fed authorities on. Wednesday.

If the data comes in weak and raises opportunities of a 50 basis. point cut in November, gold might see record rates again, De. Casa added.

Silver increased 0.1% to $31.43.

Supported by a stabilising industrial metal sector, silver. might potentially do even much better (than gold), not least. considering its relative cheapness to gold, which could see it. take aim at $40 next year, Saxo Bank said in a note.

Platinum gained 1% to $995.95 and palladium. added 1.6% to $1,010.24.

(source: Reuters)