On Tuesday, gold prices went up during European trade, extending revenues from the prior session as dismal American economic data tempered hopes for a near-term interest rate lift by the Federal Reserve, thus weighing on the greenback.
In New York, December delivery gold futures gained 0.54%, trading at $1,354.75 per troy ounce.
Yesterday, gold soared 0.32%, after data revealed the New York Federal Reserve’s index of manufacturing conditions suddenly contracted in August, thus raising worries over the strength of third-quarter economic growth.
The downbeat report led investors to push back hopes for the next American rate lift. Fed funds futures are currently pricing in about a 9% probability of a rate lift by September. As for December odds, they were at around 42%.
The greenback’s weakness normally benefits gold, because it boosts the precious metal's appeal as an alternative asset and also makes dollar-priced commodities more affordable for holders of other currencies.Publication source