Expectations of a Fed decision to pause lead to a 6-month high in gold as the currency weakens

 Expectations of a Fed decision to pause lead to a 6-month high in gold as the currency weakens

The opportunity cost of storing non-interest bearing assets is decreased by low interest rates, which often raises the price of gold.

According to CME's FedWatch tool, traders mostly anticipate that the Fed will maintain interest rates in December, but there is a 60% likelihood that rates would be lowered in May of the following year.

Due to increased demand and a declining dollar due to predictions of a halt to US interest rate rises, gold prices on Monday reached their highest level in over six months and remained over $2,000 an ounce.

At 11:47 GMT, spot gold had increased by 0.5% to $2,012.33 per ounce, having reached its highest level since May 16 at $2,017.82. At $2,013.10, US gold futures also increased by 0.5%.

After hitting a two-month low last week, the dollar lost 0.1% against major currencies, lowering the price of gold for holders of other currencies. [USD/]

Senior market analyst at OANDA Craig Erlam said, "Gold is flying alongside what really explains it is the fact that it finally broke above $2,000." He called the decision "purely technical" and said it was prompted by the jump in US inflation last week. Reports on employment and data.

Gold prices are just $60 below the all-time high of $2,072.49. They are also well above their 50-, 100-, and 200-day moving averages.

Investor attention is centered on the publication of updated US GDP statistics for the third quarter on Wednesday and the PCE price index, the Fed's favored inflation indicator, on Thursday.

According to Kyle Rodda, a financial markets analyst at Capital.com, "economic data coming through from the US this week, on both the growth as well as inflation fronts, will determine whether or not gold stays above $2,000."

Recent statistics showing a decline in US inflation has increased anticipation of an earlier than anticipated monetary policy relaxation by the Federal Reserve.

According to CME's FedWatch tool, traders mostly anticipate that the Fed will maintain interest rates in December, but there is a 60% likelihood that rates would be lowered in May of the following year.

The opportunity cost of storing non-interest bearing assets is decreased by low interest rates, which often raises the price of gold.

Palladium increased by 0.9% to $1,078.56 an ounce, platinum increased by 0.1% to $931.70, and silver increased by 1.9% to $24.76 an ounce.