Gold traded higher mid-afternoon on Wednesday as the dollar and yields fell after a U.S. inflation measure rose more than expected last month.
Gold for February delivery was last seen up US$35.80 to US$2,718.10 per ounce, the highest since Dec.11.
The U.S. Bureau of Labor Statistics said the Consumer Price Index (CPI) rose by 0.4% in December, up from 0.3% in November and ahead of the consensus estimate for a rise of 0.3%, according to FactSet. Core CPI, excluding food and energy, rose 3.2% annualized, under the consensus outlook for a 3.3% rise.
Though the Federal Reserve is still widely expected to leave interest rates unchanged at the Jan.29 end to its policy committee's meeting, the CPI data is boosting expectations for another rate cut in March, with the CME Fedwatch Tool now seeing a 29% probability the central bank will trim rates by 25 basis points, up from 23.2% on Tuesday.
The dollar fell following the data, with the ICE dollar index last seen down 0.16 points to 109.11.
Treasury yields were sharply lower, with the yield on the U.S. two-year note last seen down 10.8 basis points to 4.276%, while the 10-year note was paying 4.66%, down 13.3 points.
Source : MT Newswires
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