Gold futures settled notably higher on Tuesday as the dollar fell sharply after soft consumer price inflation data helped ease concerns about the outlook for interest rates.
The Labor Department’s report said the consumer price index crept up by 0.1% in November after climbing by 0.4% in October. Economists had expected consumer prices to rise by 0.3%.
The report also showed the annual rate of growth by consumer prices slowed to 7.1% in November from 7.7% in October.
The Federal Reserve, which is scheduled to announce its monetary policy on Wednesday, is still likely to raise interest rate by another 50 basis points, but the slower price growth may offset recent worries about future rate hikes.
The dollar index fell to 103.59 after the Labor Department released the inflation data. Despite recovering to 103.99, the index remains deep down in negative territory with a loss of about 1.1%.
Gold futures for February surged to a near six-month high at $1,836.80, before settling at $1,825.50 an ounce, up $33.20 or about 1.9% from the previous close.
Silver futures for March ended up $0.587 at $23.990 an ounce, while Copper futures for March settled at $3.8420 per pound, gaining $0.0415.
The Federal Reserve, the Bank of England, the European Central Bank and the Swiss National Bank are set to announce their monetary policies this week.
The material has been provided by InstaForex Company – www.instaforex.com
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