Gold prices rose in Asian trade on Wednesday, benefiting from a softer dollar as a batch of middling U.S. economic readings drove increased conviction that the Federal Reserve will cut interest rates in December.

Haven demand for gold appeared strong even as broader risk-driven assets rallied this week, amid lingering tensions between Japan and China, while uncertainty over a Russia-Ukraine ceasefire and stretched fiscal spending also helped.

Spot gold rose 0.9% to $4,166.13 an ounce, while gold futures for February rose 0.9% to $4,201.15/oz by 00:24 ET (05:24 GMT).

Gold rises as weak US data fuels rate cut bets
Gold surged on Tuesday and Wednesday after some economic readings for September furthered the case for more monetary easing by the Fed.

Retail sales barely grew in the month, while core producer inflation shrank more than expected, signaling persistent cooling in the U.S. economy.

The prints for September will be among the last few official economic readings the Fed has before its December meeting, with a prolonged government shutdown expected to have indefinitely delayed labor and inflation data for October.

PCE price index data, the Fed's preferred inflation gauge, was rescheduled to be released on December 5 by the Commerce Department's Bureau of Economic Analysis.

Bets on a December rate cut grew substantially over the past week, especially as two Fed officials spoke in favor of more near-term easing.

Markets are pricing in a 80.7% chance the Fed will cut rates by 25 basis points during its December 9-10 meeting, up sharply from a 42.4% chance seen last week, CME Fedwatch showed.

Other precious metal prices advanced on this notion. Spot silver rose 1% to $52.0215/oz, and was close to a record high, while spot platinum rose 0.2% to $1,559.90/oz.

Among industrial metals, benchmark copper futures on the London Metal Exchange rose 0.3% to $10,992.90 a tonne. Prices of the red metal were buoyed by major Chilean producer Codelco signaling that it will sharply increase prices for its Chinese customers.

Lower interest rates tend to benefit non-yielding assets such as gold and commodities by diminishing the appeal of rate-sensitive assets, specifically Treasuries.

Source: Investing.com