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Gold attains six-month high in global market

Colombo (LNW): Gold prices soared to a more than six-month high on Monday, surpassing the $2,000 per ounce mark, propelled by a weakened dollar and anticipation of a halt to US interest rate hikes, leading to increased demand, NDTV reported.

As of 1311 GMT, spot gold rose by 0.6 percent to $2,013.99 per ounce, marking its highest level since May 16. Similarly, US gold futures experienced a 0.6 percent increase, reaching $2,015.00.

The dollar exhibited a 0.2 per cent decline against a basket of major currencies, lingering near a more than two-month low recorded last week, making gold more affordable for holders of other currencies (USD/).

Craig Erlam, Senior Markets Analyst at OANDA, commented on the surge, stating, “Gold is flying, and to really explain it is the fact that it’s finally broken above $2,000 in a significant way.” He described the move as “purely technical,” driven by last week’s US inflation data and jobs report.

Gold prices currently exceed their 50-, 100-, and 200-day moving averages and are approximately $60 away from the all-time high of $2,072.49 set in August 2020.

Investor focus is on the release of revised US third-quarter GDP figures on Wednesday and the PCE price index, the Federal Reserve’s preferred inflation gauge, on Thursday.

Kyle Rodda, a Financial Market Analyst at Capital.com, emphasised, “Economic figures coming out of the US this week, both on the growth and inflation front, will make or break a case for whether gold remains above $2,000.”

Anticipation of an earlier-than-expected easing of monetary conditions by the Federal Reserve has heightened with recent data indicating a slowdown in US inflation.

Traders widely expect the Fed to maintain rates in December, while the CME’s FedWatch Tool indicates about a 60 percent chance of a cut in May next year.

Lower interest rates reduce the opportunity cost of holding non-interest-bearing assets, often boosting gold prices.

In the broader precious metals market, silver saw a 1.7 per cent increase to $24.71 per ounce, platinum experienced a 0.3 percent decrease to $927.64, and palladium rose by 0.8 per cent to $1,077.56 per ounce.

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